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Markets fail to react to news of US bail-out

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Markets fail to react to news of US bail-out

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Asian stocks continued to extend their declines even after the news that the Senate had approved the US government’s biggest intervention in the money markets since the Great Depression.

The MSCI Asia Pacific Index dropped 1.1 percent mid-morning, while the Nikkei fell by 0.7 percent.

In Europe, shares generally finished higher at close of trading yesterday, a sign of renewed optimism ahead of the Senate vote. Frankfurt, however, suffered substantial losses.

In London, banking stocks moved erratically during the session, but benefited from hopes that a deal for Lloyds TSB to take over HBOS will go through. HBOS shares rose by 21 percent.