Emerging markets led a worldwide equity rally today as investors welcomed the US Federal Reserve's surprise decision to keep its vast stimulus policy unchanged.
Stock markets across the globe jumped following the Fed's yesterday announcement that it would hold off tapering its USD 85-billion-a-month bond-buying scheme.
The news was especially welcome in under-pressure developing economies, which breathed a sigh of relief after suffering a heavy sell-off in August as investors bet on the Fed winding down its quantitative easing (QE) policy.
"Ben Bernanke had threatened to take away the punchbowl and bring the QE-party to an end. But he's changed his mind... and told us all to party on," said Societe Generale fixed income strategist Kit Juckes.
"Emerging Markets is the asset class which suffered most from the 'taper talk' and is the one which is bouncing most as the removal of stimulus is delayed."
In Asia, Mumbai jumped 3.43 percent, Jakarta 4.65 percent, Bangkok 3.47 percent and Manila 2.81 percent, following Wall Street higher after the Fed announcement spurred the Dow Jones Industrial Average and the S&P 500 to close at record highs yesterday.
Equities in Asia's economic powerhouses saw smaller gains.
In Tokyo, the Nikkei rose 1.80 percent. Hong Kong added 1.67 percent and Sydney rallied 1.10 percent to finish at a five-year high.
With the prospect of vast sums of cash continuing to be pumped into financial markets, the US dollar sank against emerging economy currencies, which have suffered a torrid few months on expectations the Fed would begin tightening its monetary policy.
India's rupee was at 61.83 to the dollar, well up from the record levels above 69.00 seen at the start of September, while the greenback fetched 30.92 Thai baht, compared with 32.45 baht a few weeks ago.
But the dollar bounced back against the yen, buying 99.23 yen, up from 98.06 overnight.
One euro bought USD 1.3543, up from USD 1.3516.
Elsewhere, emerging market equities followed Asia's lead today.
South Africa's JSE Top 40 index jumped 2.32 percent in afternoon trade, and the Fed decision sent the rand climbing to 9.6372 to the dollar, up about seven percent from a low point set last month.
