Asian shares mostly up as US narrowly avoids default
Quotes

Asian shares mostly up as US narrowly avoids default

Last Updated: Thursday, October 17, 2013, 12:40
 
 Comment 0
 
Asian shares mostly up as US narrowly avoids default
Hong Kong: Asian shares rose Thursday after US lawmakers passed a last-minute bill to reopen the government and raise the country`s borrowing limit, avoiding a devastating default that threatened to spark another global recession.

Investors breathed a sigh of relief as Republican and Democratic senators found a compromise budget after weeks of bitter rows on Capitol Hill that called into question Washington`s credibility with its creditors, including China and Japan.

Tokyo rose 0.83 percent, or 119.37 points, to close at 14,586.51, Seoul added 0.29 percent, or 6.00 points, to finish at 2,040.61, while Sydney climbed 0.38 percent, or 20.2 points, to end at 5,283.1.

In the afternoon Hong Kong was flat but Shanghai eased 0.25 percent as traders grew jittery about the release of Chinese growth data on Friday.

Global markets had been on tenterhooks over the crisis, which saw Democrats refuse to give in to Republican demands for a new budget to include cuts to President Barack Obama`s flagship healthcare bill.

But with just hours to go before a Thursday deadline to raise the debt ceiling, Senate party leaders reached an agreement to reopen a government that was shut down on October 1, while extending the debt ceiling until the new year.

Congress passed the bill with cross-party support before it was signed by Obama in the early hours.

The bill restarts government operations until January 15 and raises the debt ceiling until February 7, giving lawmakers time to draw up a longer term deal.

Soon after the deal was announced Obama said: "Once this agreement arrives on my desk, I will sign it immediately.

"We`ll begin reopening our government immediately, and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people."

But while the breakthrough has been widely welcomed, equity gains were limited.

"Approval of the debt deal eliminates uncertainties, which is good for the market," Keisuke Shirasuka, chief fund manager at Mitsubishi UFJ Asset Management, told Dow Jones Newswires.

"However, as the market wasn`t factoring in a US default, shares weren`t oversold. Consequently, the approval will unlikely trigger major buy backs."

Despite the upbeat news from Capitol Hill Credit Agricole said: "We have a short-term extension but will likely be in a similar `crisis` situation early next year... It`s hard to be optimistic on any easy solution in the negotiations that will take place over the next few months."

On currency markets the dollar spiked against the yen in early trade, hitting 99.00 at one point, before falling in the afternoon.

The greenback bought 98.40 yen against 98.79 yen in New York Wednesday, while the euro fetched USD1.3559 and 133.44 yen compared with USD1.3535 and 133.74 yen.

Economists had warned that failure to raise the debt ceiling would have sent the US into a historic default that would have put global markets in a tailspin and sparked a global recession worse than that seen after the 2008 financial crisis.

Washington`s top creditors China and Japan -- which between them hold more than USD2.4 trillion of US debt -- had also called on US lawmakers to get their house in order, saying a default would have devastating consequences.

In oil trade New York`s main contract, West Texas Intermediate (WTI) for delivery in November, was down 12 cents to USD102.17 a barrel in afternoon trade, and Brent North Sea crude for December dipped one cent to USD110.58.

Gold cost USD1,276.80 at 0650 GMT compared with USD1,282.80 on Wednesday.
In other markets:

-- Taipei gained 0.51 percent, or 42.50 points, to 8,374.68.

Taiwan Semiconductor Manufacturing Co. rose 0.94 percent to TwUSD107.0 while Hon Hai was 0.27 percent higher at TwUSD73.7.

-- Wellington advanced 0.36 percent, or 17.23 points, to 4,776.00.

Air New Zealand was up 1.33 percent at NZUSD1.52, Fletcher Building eased 0.42 percent to NZ%9.49 and Telecom was flat at NZUSD2.28.



AFP

First Published: Thursday, October 17, 2013, 12:40


Comments


comments powered by Disqus
Google I/O 2014
Google I/O 2014
Maker Faire @ White House
Maker Faire @ White House
Amazon unveils 3D `Fire` smartphone
Amazon unveils 3D `Fire` smartphone
RIL`s 40th AGM
RIL`s 40th AGM
Samsung Galaxy Tab S
Samsung Galaxy Tab S

Web Wrap
Contact Us : Privacy Policy : Legal Disclaimer
Copyright © Zee Media Corporation Ltd. All rights reserved