Asia stocks up on hopes for a US budget deal

AP News
Posted: Nov 28, 2012 9:55 PM
Asia stocks up on hopes for a US budget deal

BANGKOK (AP) — Signs that U.S. political leaders may be closing in on a budget deal to avoid the so-called "fiscal cliff" boosted Asian stock markets Thursday.

Comments by President Barack Obama and Speaker of the House John Boehner that a deal to avoid a budget crisis could be reached before year's end was enough to boost markets in the face of disappointing U.S. home sales, a critical indicator of whether the economy is improving.

Japan's Nikkei 225 index rose 0.7 percent to 9,369.02. Hong Kong's Hang Seng rose 0.5 percent to 21,819.35 and South Korea's Kospi added 0.9 percent to 1,929.21. Australia's S&P/ASX 200 gained 0.5 percent to 4,486. Benchmarks in Singapore, Taiwan and mainland China also rose.

Obama and the U.S. Congress have until Jan. 1 to agree on how to trim the country's unwieldy deficit. Otherwise, a series of automatic tax increases and sharp spending cuts will take effect that could drag the world's No. 1 economy into recession. Obama said Wednesday he believes a "framework" agreement can be reached before Christmas.

Concern that the U.S. will go over the fiscal "cliff" has weighed on stocks since the Nov. 6 elections returned a divided government to power, with Obama staying in the White House and Republicans retaining control of the House of Representatives.

U.S. sales of new homes fell slightly in October, down 0.3 percent to a seasonally adjusted annual rate of 368,000. The government also said Tuesday that September sales were slower than initially reported.

In Europe, sentiment improved this week after Greece's bailout creditors agreed to pay its next installment of loans and outlined a series of measures to lower its debt load over the coming decade. Concerns remain, however, over the country's economy, which is expected to enter a sixth year of recession in 2013.

On Wall Street, the Dow Jones industrial average rose 0.8 percent to close at 12,985.11 on Wednesday. The Standard & Poor's 500 index rose 0.8 percent to close at 1,409.93. The Nasdaq composite rose 0.8 percent to 2,991.78.

Benchmark oil for January delivery was up 22 cents to $86.70 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 69 cents to close at $86.49 per barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.2953 from $1.2932 late Wednesday in New York. The dollar rose to 82.09 yen from 81.90 yen.