Asia stocks up on hopes for a US budget deal
Asian stock markets rise on signs that US leaders could strike budget deal before deadline
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 9,377.91. Hong Kong's Hang Seng jumped 1.1 percent to 21,942.92 and South Korea's Kospi added 0.9 percent to 1,930.15. Australia's S&P/ASX 200 gained 0.6 percent to 4,473.70. 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" for an agreement can be reached before Christmas.
"It's really a headline market at the moment. We'll probably continue to see headlines on the fiscal cliff supersede any economic data until it is resolved," said Stan Shamu of IG Markets in Melbourne. "The longer it stretches out, the more risk there is that it will cause further volatility in the markets. But for now, it seems markets are on the right track."
Among Japanese stocks, Nakayama Steel Works shot up 32.5 percent after a Nikkei business daily reported the company will seek restructuring and loan waivers from banks. Kobe Steel gained 4.2 percent. Export-dependent shares also rose, including Yamaha Motor Co., up 4.7 percent; and Honda Motor Co., up 2 percent.
Hong Kong-listed property shares also posted solid gains, including Evergrande Real Estate Group, which jumped 6.1 percent. China Resources Land advanced 3.5 percent.
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 26 cents to $86.75 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 $1.2950 from $1.2932 late Wednesday in New York. The dollar rose to 82.09 yen from 81.90 yen.
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