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Asian stocks rise on momentum from US budget deal

Published on NewsOK Modified: January 2, 2013 at 11:25 pm •  Published: January 2, 2013
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BANGKOK (AP) — Asian stock markets rose again Thursday on a second day of momentum following an agreement preventing the U.S. from going off the so-called fiscal cliff.

A last-minute deal agreed to by U.S. lawmakers late Tuesday prevents steep tax and spending cuts from automatically taking effect. The cost of those cuts was so great that economists were warning they could eventually trigger a recession in the world's largest economy.

"Regional equities are seeing a continuation of the buoyant risk environment in Asia today as investors react to the passing of the fiscal cliff deal," Stan Shamu, market strategist at IG Markets in Melbourne, said in a market commentary.

Benchmarks in Hong Kong and Sydney crested above the 19-month highs hit on Wednesday. Hong Kong's Hang Seng Index rose nearly 0.2 percent to 23,348.03, while Australia's S&P/ASX 200 rose 0.8 percent to 4,742.30. Benchmarks in Singapore, Taiwan, Indonesia, Thailand, the Philippines and New Zealand also rose.

South Korea's Kospi fell 0.6 percent to 2,019.61 amid fears the weakening Japanese yen could hurt South Korean exporters. Hyundai Motor Co., the country's largest carmaker, tumbled 5.1 percent. Auto parts maker Mando Corp. slid 4.7 percent.

Markets in Japan and mainland China were closed for extended holidays.

Wall Street stocks soared Wednesday, the first trading day of the year, amid investor relief that Republicans and Democrats hammered out a last-minute budget deal, though the compromise left many issues unresolved.

The deal doesn't include any significant deficit-cutting agreement, meaning the country still doesn't have a long-term plan or even an agreement in principle on how to curb spending. Big cuts to defense and domestic programs, which would have hit with the new year, weren't worked out but instead were delayed for two months.

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