NEW YORK, Oct 31: Stocks have rallied in the Americas, buoyed by a new set of policies from leading industrial nations aimed at shoring up the global financial system. The news yesterday, which included an infusion of funding for the International Monetary Fund, also lifted bond markets in nations like Brazil, whose economy has been seen as a potential next victim of the turmoil. The IMF will get an extra $90 billion to tackle credit crunch in afflicted countries. Prices for US government bonds fell after the group of seven announcement and a report showing the US economy grew at a surprisingly fast 3.3% cent rate in the third quarter.Given the strength of the economy and the far-reaching reforms by the G-7, analysts said investors appeared willing to absorb the added risk of stocks and emerging market investments even before concrete action took place.
"Some people say the solutions are not in place yet, but I say the right policy levers are being pulled so we avoid something worse," said JosephBattipaglia, chief investment officer at Gruntal & Co.
The Dow Jones industrial average jumped 97 points, or 1.1% , to 8,592, its highest in more than two months. Stocks surged 7.8 per cent in Brazil and 4.3 per cent in Mexico. The benchmark 30-year US treasury fell more than a full point, pushing the yield, which moves in the opposite direction from the price, to 5.15% from 5.08 %.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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