INSTANT VIEW: Senate passes $700 bln financial rescue

WASHINGTON (Reuters) - The U.S. Senate approved a $700 billion bailout of the financial industry on Wednesday that political and financial leaders called crucial to averting economic catastrophe.

The bill is aimed at reinvigorating worldwide credit markets and interbank lending that had frozen up while overleveraged financial institutions staggered under the weight of failed mortgages.

The bill next goes to the House of Representatives, where a vote is likely on Friday. The following are market comments on the move.

COMMENTS:

GERARD RIGBY, FUEL FIRST CONSULTING, SYDNEY

"This will support the U.S. economy and help to maintain demand for oil products. Therefore we should not see a collapse on oil demand that traders are fearing.

"Demand will be lower compared with a year ago but the bill will help to put a floor to it. Traders, fearful of inflation and equities, will see commodities and oil as a safe haven.

"Funds will flow into these markets and I don't see oil prices falling to below $90 a barrel."

HIROAKI KURAMOCHI, CHIEF EQUITY MARKETING OFFICER, TOKAI TOKYO SECURITIES

"Investors increasingly view that it's still unclear if today's passage of the bill will lead to the fundamental solution of the problems.

"We still need to see the vote result in the U.S. House, on top of the jobs data and the impact (of the bailout) on the real economy."

THOMAS CHOI, HEAD OF EQUITIES, UBS HANA ASSET MANAGEMENT SEOUL

"While the news is certainly positive, it is not going to solve lots of problems we already have in markets and economies today. It's quite obvious at this point that the real economy is in for a serious downturn, with the latest set of economy data pointing to severe drying-out in source of funds, or money, for average consumers, as the employment situation worsens. The wealth effect has been literally erased by current real estate market downturn.

"It's mountains after mountains of troubles, and the economy will probably remain in slump for at least another year.

MASAMICHI ADACHI, SENIOR ECONOMIST, JPMORGAN SECURITIES, JAPAN

"This is clearly positive news but there's still the lower house vote, so there is little room for optimism. Even if the bill is passed, worries remain over the global economic outlook so financial markets are unlikely to stabilize.