Beijing, Sep 29 (AP) Asian stock markets followed Wall Street higher on Thursday after Britain's central bank moved forcefully to stop a budding financial crisis.

Market benchmarks in Hong Kong, Seoul and Sydney added more than 1 per cent. Shanghai and Tokyo also rose. Oil prices edged lower after jumping by more than USD 3 per barrel the previous day.

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Wall Street's benchmark S&P 500 index surged 2 per cent on Wednesday for its biggest gain in seven weeks after the Bank of England announced it would buy as many government bonds as needed to restore order to financial markets.

That helped to calm investor fears that planned British tax cuts would push up already high inflation.

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That had caused the value of the British pound to fall to its lowest level since the 1970s and bond prices to plunge.

“The risk of a major financial accident has been reduced in the short term,” said David Chao of Invesco in a report. “The focus will return to the still pressing macro challenges facing major economies.”

The Shanghai Composite Index rose 0.8 per cent to 3,068.87 and the Nikkei 225 in Tokyo gained 0.6 per cent to 26,341.76. The Hang Seng in Hong Kong jumped 1.3 per cent to 17,477.97.

The Kospi in Seoul gained 1.1 per cent to 2,193.82 and Sydney's S&P ASX 200 rose 1.6 per cent to 6,566.80.

New Zealand and Southeast Asian markets also advanced.

On Wall Street, the S&P 500 rose to 3,719.04 after the Bank of England said it would buy bonds over the next two weeks to stop a slide in prices.

Investors were rattled by plans for 45 billion pounds (USD 48 billion) of tax cuts with no spending reductions.

The central bank earlier warned crumbling confidence in the economy posed a “material risk to UK financial stability.”

The International Monetary Fund took the rare step of urging a member of the Group of Seven advanced economies to abandon its plan for tax cuts and more borrowing.

The Dow Jones Industrial Average rallied 1.9 per cent to 29,683.74. The Nasdaq composite climbed 2.1 per cent to 11,051.64.

Despite Wednesday's gain, the S&P 500 is down more than 20 per cent from its January 3 record, which puts it in what traders call a bear market.

Forecasters see more turbulence ahead due to worries about a possible recession, higher interest rates and even higher inflation.

The yield on the 10-year US Treasury, or the difference between its market price and the payout if held to maturity, briefly exceeded 4 per cent on Wednesday, its highest level in a decade.

Investor fears are growing that aggressive interest rate hikes this year by the Federal Reserve and central banks in Europe and Asia to cool inflation that is at multi-decade highs might tip the global economy into recession.

The investment giant Vanguard puts the chance of a US recession at 25 per cent this year and at 65 per cent next year if the Fed follows through on expectations it will raise rates again and keep them elevated through next year.

In energy markets, benchmark US crude lost 32 cents to USD 81.83 per barrel in electronic trading on the New York Mercantile Exchange.

The contract surged USD 3.65 on Wednesday to USD 82.15. Brent crude, the price basis for international oils, shed 30 cents to USD 87.75 per barrel in London. It gained USD 3.05 the previous session to USD 89.32.

The dollar gained to 144.32 yen from Wednesday's 143.96 yen. The euro declined to 96.82 cents from 97.43 cents.(AP)

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