Nervous markets take heart from big Australia rate cut

Guarded optimism mounted on Tuesday for a unified international response to the credit crisis ricocheting around the world after Australia cut interest rates far more steeply than expected.
The focus shifted to other central banks, from Japan to Europe, for their answers to a call from U.S. officials for a "forceful and coordinated" global reaction to kickstart anaemic bank lending.
Despair that such a solution had not yet been found weighed on some markets. Investors soured in particular on South Korea's ability to weather the storm.
But equities across Asia and commodity prices rallied after the Australian central bank slashed its benchmark cash rate by 100 basis points, the biggest single cut since 1992.
The MSCI index of Asian stocks outside Japan gained 1.5 percent, rebounding from its lowest level in nearly three years. Oil prices, down nearly 40 percent from their peak because of recession worries, climbed back over $90 a barrel.
Japan's central bank, with far less room to manoeuvre, voted to keep rates unchanged, but gave a grim prognosis for the economy that hinted at more actions to boost liquidity.
The furious sell-off in global equities in recent weeks and the deepening freeze in credit markets has made this week's Group of Seven rich nations' meeting in Washington even more important.