iOS app Android app More

Asian markets cheer US deal to avoid debt default

stumbleupon: Asian markets cheer US deal to avoid debt default   digg: US Works With Sudan Government Suspected Of Aiding Genocide   reddit: Asian markets cheer US deal to avoid debt default Asian markets cheer US deal to avoid debt default

EILEEN NG | October 16, 2013 11:59 PM EST | AP

Compare other versions »

KUALA LUMPUR, Malaysia — KUALA LUMPUR, Malaysia (AP) — An eleventh hour agreement that averted a U.S. government debt default boosted Asian stock markets Thursday.

Gains, however, were relatively modest. The budget and debt impasse had caused jitters but markets had not sold off severely as investors and analysts largely believed U.S. lawmakers would reach agreement at the last minute, as they did in a previous budget standoff.

After a Senate vote, Congress passed and sent a waiting President Barack Obama legislation late Wednesday night to raise the $16.7 trillion debt limit and end a 16-day partial government shutdown.

The deal, which permits the Treasury to borrow normally through Feb. 7 and fund the government through Jan. 15, was reached after a month of political gridlock and just hours before a Thursday deadline to raise the borrowing limit, avoiding a potentially catastrophic debt default.

Analysts said the deal has soothed immediate worries but didn't deal with the root issue, which will result in another showdown two months later.

"The U.S. budget and debt drama appears to be over for now. We have a short-term extension but will likely be in a similar crisis situation early next year," said analysts at Credit Agricole CIB in Hong Kong in a market commentary. "Nevertheless, we expect market tone to improve over the near term."

Japan's Nikkei 225 rose 1.2 percent to 14,636.17 and Hong Kong's Hang Seng was up 0.3 percent at 23,286.31. China's Shanghai Composite added 0.6 percent to 2,204.78 and Seoul's Kospi gained 0.2 percent to 2,037.32. Stock indexes in Australia, Singapore, Malaysia, New Zealand and the Philippines also gained.

The budget deal also lifted Wall Street. The Dow Jones climbed 205.82 points, or 1.4 percent, to 15,373.83. The S&P 500 gained 23.48, or 1.4 percent, at 1,721.54. The Nasdaq composite climbed 45.42, or 1.2 percent, to 3,839.43.

In energy markets, benchmark crude for November delivery fell 10 cents at $102.19 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.08 to close at $102.29 on Wednesday.

The euro rose to $1.3547 from $1.3523 late Wednesday. The dollar dropped to 98.65 yen from 98.89 yen.