Asian stocks up as US holds rates

9 August 2011 Last updated at 20:25 ET

Stock markets have lost trillions of dollars in value over the last few weeks

Asian markets have rebounded after the US Federal Reserve said it will keep interest rates on hold and Wall Street had its best day in two years.

The decision by the US central bank to keep rates at current levels until at least 2013 helped stem one of the biggest sell-offs in recent years.

Japan’s Nikkei 225 index gained 2%, South Korea’s Kospi rose 4% and Australia’s ASX added 1%.

However, analysts say markets will remain choppy amid global growth fears.

They said that while the Fed’s assurance on keeping the rates low has managed to calm markets for now, the fact that it has not announced any other measures to boost growth may dent sentiment going forward.

“The more difficult question is, what is going to happen over the next two weeks or so,” said Robin Bew of the Economist Intelligence Group.

“I suspect that a lot of traders will be disappointed that the Fed did not go any further,” he added.

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