That was good news for Asian markets across the region, the mood was upbeat after months of gloom. The US rate cuts also made dollar-denominated fixed-income investments look less attractive and pushed most Asian currencies up.

The cut was expected to help the US economy so critical to the exports of many crisis-stricken Asian nation from sagging. It also raised hopes that Asian banks would reduce their own rates and give a further boost to business in a region mired in an economic crisis now more than a year old.

At the lunch break, the Singapore's Straits Times Index (STI) was up 7.71 per cent, or 79.05 points, at 1,103.80, bursting through the 1,100 resistance level for the first time since June.Euphoria after the Fed cut. "You feel a kind of frenzied mood in the market. I don't know how long it will go on," one local broker said.

A foreign broker said the rally, with brief profit-taking, could continue in the short-term because it was now the turn of Asian central banks to lower their interest rates. "The markets will take their leads from there," he said. in the best rate cuts. "Where are we going to get fresh capital to get the economy running ?" he asked. "The rise today is naturally good. We have been in crisis for over 15 months now."

In Australia, the benchmark All Ordinaries index rose more than two per cent to 2,510.1 points. "Moves like the rate cut add to confidence generally," said Harley Poynton broker Robin Forbes. "It shows the monetary authorities are not going to let the US economy fall into a recession. They are prepared to take preventive action."

Similar upbeat sentiment struck the whole region like a lightning bolt, with Tokyo's Nikkei 225 morning session 2.19 per centhigher at 13,280.29. In Hong Kong the index was 7.47 per cent, slightly off its morning high of 9,695.63. Brokers hoped Hong Kong would follow the US step in cutting interest rates.

In Jakarta, the composite index was up 6.5 per cent at 324.6. Thai shares leapt 8.19 per cent at 319.36 at mid-day recess. The cheerful mood also helped Asian currencies firm against the dollar, although the US currency had regained some ground against the yen by mid-day.

The dollar was top-heavy against the yen at mid-day at 116.25/30 after slipping to as low as 115.40 following the Fed move. In a tele conference with journalists in Asia, International Monetary Fund Deputy Managing Director Stanely Fischer applauded the US cut. "The Fed was doing what is necessary," he said and encouraged Europe to follow suit.

"That European interest rates on average should come down is important," he said. "An interest rate cut in Europe would do no harm." Fischer said IMF executives had been encouraged by a change of heart on rate cutsamong Europeans during the IMF/World Bank annual meeting in Washington last week.

He said European delegates had arrived thinking things were good and they had no need to consider rate cuts, but left thinking real challenges faced the global economy if there were no move to lower interest rates. "This is an important point of the consensus of the need to reinvigorate the world economy," he said.