Global Markets Soar on Optimism Over New Economic Stimulus Packages

Asia to Extend Stock Rally on New Chinese Measures, Markets Wrap

Asian stocks are expected to extend their rally today after China announced a package of measures to support its economy, including cutting interest rates and reserve requirements for banks.

The Chinese government's move to stimulate its slowing economy sent shockwaves through global markets, driving the MSCI Asia-Pacific Index up 2.5% yesterday. The index, which tracks the performance of 50 of the region's biggest companies, is now up 4.5% this week.

In China, the Shanghai Composite Index surged 3.4% to its highest level in nearly two months, while the CSI300 Index of blue-chip stocks jumped 3.6%.

The Chinese government's measures included a 0.25-percentage-point cut in the one-year lending rate, as well as a 0.5-percentage-point reduction in the reserve requirement ratio for banks. The central bank also cut the rate on one-year medium-term lending facility by 0.25 percentage points.

The moves were seen as a bid to boost China's economy, which has been slowing due to a decline in exports and a property market that has been cooling. The country's GDP growth rate slowed to 7.3% in the second quarter from 7.5% in the previous quarter.

The rally in Asian stocks was also driven by gains in the US, where the Dow Jones Industrial Average rose 1.4% yesterday. The S&P 500 Index and the Nasdaq Composite Index also jumped, with the S&P 500 up 1.2% and the Nasdaq up 1.5%.

In other markets, oil prices rose after the International Energy Agency cut its forecast for global oil demand. Brent crude oil rose 1.1% to $64.45 a barrel, while West Texas Intermediate crude oil gained 1.2% to $59.45 a barrel.

The Japanese yen weakened against the US dollar, while the euro rose against the greenback. The US dollar index, which measures the currency's value against a basket of six major currencies, fell 0.3%.

In corporate news, Japan's Toshiba Corp. surged 7.4% after the company said it would delay the release of its quarterly earnings report due to an investigation into accounting irregularities. The company's shares have fallen sharply in recent weeks amid concerns over its financial health.