March 17 (Bloomberg) -- Asian stocks, U.S. index futures and the dollar tumbled, while bond futures rose, after the Federal Reserve cut its discount interest rate at an emergency meeting and JPMorgan Chase & Co. agreed to buy Bear Stearns Cos.
All Asian stock benchmarks open for trading fell, led by National Australia Bank Ltd. in Sydney and Mitsubishi UFJ Financial Group Inc. in Tokyo. The dollar sank to a record low against the Swiss franc and a 12-year low against the yen.
``It's dire,'' said Angus Gluskie, who helps manage the equivalent of $500 million at White Funds Management in Sydney. The Fed's actions are ``indicative of the very significant credit issues we've got globally at the moment. And what we've seen with Bear Stearns is just another step in the process.''
The Federal Reserve is stepping up efforts to prevent strains on financial markets from worsening. The rate-cut decision, taken ahead of the Asian trading day, coincided with JPMorgan buying Bear Stearns for about $240 million, or the equivalent of $2 per share, about 1/40th its share price of a month ago. The company said on March 14 its liquidity position had ``significantly deteriorated'', prompting the Federal Reserve to provide history's largest bailout of a U.S. securities firm.
The dollar weakened to as low as 96.58 against the yen, a level not seen since August 1995, after the Fed said it would lower the rate on direct loans to commercial banks by 25 basis points to 3.25 percent to ensure ``orderly market functioning.'' Japan's 10-year government bonds rose, sending yields 3 basis points lower to 1.23 percent.
Read More: Bloomberg
