Asian markets rise after U.S. rate cut

(CNN) -- Asian and Pacific markets gained value Thursday in response to the U.S. Federal Reserve's interest rate cut, although Wall Street's reaction was mixed.

At midmorning, South Korea's KOSPI soared 9.1 percent, Hong Kong's Hang Seng and the Taiwan Weighted were up about 5.5 percent, and Japan's Nikkei was up 3.8 percent, as was Singapore's Straits Times.

Australia's All Ordinaries index increased 3.4 percent by early afternoon.

On Wall Street, the Dow Jones industrial average in New York lost about 74 points, or 1 percent, after having risen as much as 298 points shortly before the close. The Nasdaq also gave up a bigger advance but closed up half a percent. The initial stock rally fizzled out by the close, as investors digested the Fed's assessment and geared up for a report Thursday on the gross domestic product.

The Fed's interest rate cut by half-a-percentage point to 1 percent matched its lowest-ever level, the last time being from June 2003 to June 2004. It was the ninth time the central bank has lowered the rate since September 2007 -- and the second this month after an emergency cut on October 8.

The rate is used to set rates for a wide variety of consumer loans, including credit cards, and many business loans. Watch what the Fed cut means »

Major European markets, which closed before the Federal Reserve Bank acted, gained value. Paris's CAC 40 soared 9.2 percent, and London's FTSE 100 gained 8.1 percent. Frankfurt's DAX 30 closed just below even.

Meanwhile, the International Monetary Fund, European Union and World Bank announced a joint financing package that should provide $25 billion for Hungary.

The money will help bolster a Hungarian economy that has been "hit hard by recent financial market turbulence," the International Monetary Fund (IMF) said in a statement.

The planned financial package for Hungary follows recent announcements of tentative loan agreements between the IMF and Iceland and Ukraine -- and is the first to a member of the European Union.

"Proposed World Bank assistance would support the design and implementation of reforms in key areas, such as the financial sector, fiscal management, and social sector reforms. These measures would support the country's longer-term stabilization and economic restructuring," said Orsalia Kalantzopoulos, World Bank director for Central Europe and the Baltic Countries.

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