Asian markets end mixed on bold RBA rate cut (MarketWatch) (07-10-2008)

HONG KONG (MarketWatch) -- Asian markets had opened with a sharp fall after the tumble on Wall Street, but Australian shares rallied on Tuesday, as the country’s central bank cut lending interest rates by a full percentage-point, as the financial markets crisis worsens worldwide.

The recovery in Sydney also helped stocks elsewhere either rebound or pare their losses, with bargain buyers snapping up shares at lower levels after they were pounded on Monday.

The S&P/ASX 200 index gained 1.9% to 4,627.50 in Sydney, spurred by the rate cut. Earlier in the day, the index had slumped as low as 4,391.90.

The Reserve Bank of Australia cut its benchmark rate by a percentage point to 6.0% from 7.0%. The move came amid a global financial crisis, and the question remains whether the banks will pass on the benefit to their customers or will take advantage of it to shore up their own balance sheets..

Even so, shares of Westpac Banking Corp. rose 3.7%, and Commonwealth Bank of Australia advanced 2.8%, reversing early losses. Resource stocks also gained, with BHP Billiton rallying 5.3%.

In Tokyo, the Nikkei 225 Average was down 2.1% to 10,255.65 in the afternoon, but it was way off the day's low at 9,916.21. The benchmark dropped below the 10,000-point level earlier in the day for the first time since December 2003, after steep losses on Wall Street overnight. The broader Topix index fell 1.4% to 984.68.

Elsewhere, South Korea's Kospi rose 0.4% to 1,364.50, China's Shanghai Composite fell 1.7% to 2,137.74, and Singapore's Straits Times index climbed 2.4% to 2,219.18.

India's Sensitive Index rallied 2.5% to 12,090. Shares were buoyed a day after the Reserve Bank of India cut the cash reserve ratio -- or the amount of deposits that banks need to keep with the central bank -- by a half-point to 8.5% to boost liquidity.

New Zealand's NZX 50 index was down 1.5% to 3,004.19 in late afternoon trading. Earlier in the day, the index dropped below the psychologically important 3,000-point level for the first time since June 2005.

Source: MarketWatch