Fri, Oct 18, 2013 - Page 15 News List

Asian markets see gains as US avoids default

AFP, HONG KONG

Asian shares rose yesterday 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.

Taipei gained 0.51 percent, or 42.50 points, to 8,374.68, but Hong Kong lost 0.57 percent, or 133.45 points to 23,094.88, while Shanghai closed down 0.21 percent, or 4.53 points, at 2,188.54 as dealers await the release today of China’s third-quarter economic growth data.

“Approval of the debt deal eliminates uncertainties, which is good for the market,” Mitsubishi UFJ Asset Management chief fund manager Keisuke Shirasuka told reporters.

“However, as the market wasn’t factoring in a US default, shares weren’t oversold. Consequently, the approval will unlikely trigger major buy backs,” Shirasuka added.

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 US dollar spiked against the yen in early trade, hitting ¥99.00 at one point, before falling in the afternoon.

The greenback bought ¥98.00 against ¥98.79 in New York on Wednesday, while the euro fetched US$1.3620 and ¥133.46 compared with US$1.3535 and ¥133.74.

In oil trade, New York’s main contract, West Texas Intermediate for delivery next month, was down US$0.55 to US$101.74 a barrel in afternoon trade, and Brent North Sea crude for December dipped US$0.48 to US$110.11.

Gold cost US$1,310.40 compared with US$1,282.80 on Wednesday.

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