Asia rises on ECB boost

GLOBAL MARKETS/ STOCK REPORT

Most Asian stocks rose, led by consumer-electronics companies, after the European Central Bank added $500 billion to the financial system as part of a global effort to ease credit-market gridlock.

Hon Hai Precision Industry, maker of Apple's iPod, led gains on speculation the ECB's record injection will support global economic growth.

Toyota Motor paced declines in Japan after the government cut its growth forecast for the economy.

The MSCI Asia Pacific Index was little changed at 152.25 as of 7:42 pm in Tokyo, with about six stocks advancing for every five that declined. The benchmark has risen 8.3 per cent this year, on course for its smallest annual gain in five years.

Japan's Nikkei 225 Stock Average slumped 1.2 per cent. Benchmarks in other markets rose, except for Australia, Thailand and the Philippines.

After the European Central Bank added funds, the two-week euro interbank offered rate, which had climbed as banks refrained from lending to each other, dropped a record 50 basis points to 4.45 per cent, the European Banking Federation said on Tuesday.

EUROPE
European stocks fell for a third day on concern the risk of rising inflation will prevent policy makers from reducing interest rates.

Barclays, the UK's third-biggest bank, and Natixis fell after Goldman Sachs recommended investors sell the stocks, citing the risk of "credit contagion."

Inbev declined as JPMorgan Chase offered to sell as much as 218 million euros ($313 million) of shares in the world's largest brewer.

The Dow Jones Stoxx 600 Index lost 0.7 per cent to 358.05 at 10:49 am in London. The index has fallen 2 per cent this year, the worst performance since 2002, on deepening concern that credit-market problems will spill into the rest of the economy.

European Central Bank President Jean-Claude Trichet said on Wednesday the region's economy faced a ``more protracted'' period of elevated inflation than previously expected, signaling no imminent plan to lower interest rates to ease the credit squeeze.

US
US stock-index futures dropped on speculation that the European Central Bank's injection of $500 billion into the financial system may not be enough to reverse the global credit tightening.

Bank of America, the largest US bank by market value, and Lehman Brothers Holdings, fell. Standard and Poor's 500 Index futures expiring in March lost 8.5 points to 1,458 at 10:29 am in London. Dow Jones Industrial Average futures decreased 68 points to 13,260.

Nasdaq-100 Index futures fell 7.75 points to 2,042.5.

"The ECB intervention didn't take away the uncertainty in the market," said Patrizio Pazzaglia, who helps manage the equivalent of $400 million at Bank Insinger de Beaufort NV in Rome. "We're not back to normality and it will take a few more weeks to get past this volatility."