Asian gets Fed fillip

GLOBAL MARKETS/ STOCK REPORT

Asian stocks rose for a second day, extending a global rally, after the US Federal Reserve said it will pour $200 billion into the financial system to revive lending among banks.

Commonwealth Bank of Australia climbed in Sydney by the most in more than six weeks. Toyota Motor , which gets 37 per cent of its sales in North America, and BHP Billiton, the world's largest mining company, gained on speculation of revival in demand.

The MSCI Asia Pacific Index surged 1.6 per cent to 140.08 as of 5:26 pm in Tokyo. Eight of the gauge's 10 industry groups advanced, with three stocks climbing for each one that fell. Financial stocks, the worst performing group this year, provided the biggest lift on Wednesday.

Japan's Nikkei 225 Stock Average added 1.6 per cent to 12,861.13 as the cost to protect the country's corporate debt from default fell from a record. Australia's S&P/ASX 200 Index climbed 2.4 per cent, the biggest jump since February 14.

All markets in Asia rose except China, which declined amid concern that the government would raise interest rates to rein in inflation that's at an 11-year high.

Malaysia's key stock index rebounded for a second day from its biggest decline in a decade after the country's ruling coalition was returned to power with a reduced parliamentary majority. Europe
European stock-index futures rose, following the biggest rally in US stocks in five years, on speculation the Federal Reserve's lending plan will ease the credit-market gridlock and boost demand for commodities.

Lloyds TSB Group, the biggest UK provider of consumer loans, and BNP Paribas, France's largest bank, may lead financial shares higher.

Futures on the Dow Jones Euro Stoxx 50 Index, a benchmark for the euro region, increased 43 points, or 1.2 per cent, to 3,658 as of 7:31 am in London. The UK's FTSE 100 Index may add 73 points, according to CMC Markets.

The Fed said it plans to lend Treasuries in exchange for mortgage-backed securities and other debt that has plunged in value as homeowners defaulted on their payments.

US
US stock-index futures were little changed as an increased sales forecast from Caterpillar Inc offset speculation the Federal Reserve's plan to pump $200 billion into the financial system won't stem credit-market losses.

Caterpillar, the world's largest maker of bulldozers, advanced in Germany. Morgan Stanley and JPMorgan Chase retreated after the Standard & Poor's 500 Financials Index posted its biggest gain in eight years yesterday.

S&P 500 futures expiring this month added 0.7 points to 1,324.6 at 9:27 am in London. Dow Jones Industrial Average futures gained 6 points to 12,196. Nasdaq-100 Index futures rose 2.5 points to 1,753.

"There are a lot of decent, high-quality large-cap stocks out there in the US,'' said Kully Samra, US equity markets analyst at Charles Schwab UK. "Still, the credit-market problems are still there and you can't get away from them."