Asian shares higher, lifted by US hopes

2012-12-05 07:56

Hong Kong - Asian markets rose on Wednesday on hopes for progress in talks in Washington aimed at avoiding the fiscal cliff, while Australia said its economy grew in line with forecasts in the third quarter.

The dollar and euro continued to enjoy support against the yen while the Japanese unit remains under pressure on expectations of new monetary easing after the upcoming general election.

Tokyo gained 0.12% by the break, Seoul was flat, Sydney was 0.27% higher and Shanghai, which has been touching four-year lows, climbed 2.00%, while Hong Kong added 1.08%.

As Republicans and Democrats trade barbs, talks in Washington remain gridlocked just weeks before the package of huge tax hikes and spending cuts is due to take effect on January 1, which would likely tip the US into recession.

On Tuesday President Barack Obama warned Republicans there would be no deal without them agreeing to raise taxes on the rich, a stand they have made clear they are loathe to budge from.

But he did offer a hint of wiggle room, declining to state that the top income tax rate must go up and permanently remain at the 39.6% level seen under the Clinton administration.

"We have the potential of getting a deal done," Obama told Bloomberg TV, adding that Republican proposals to close loopholes and cap deductions would not produce sufficient revenue to make a serious cut in the deficit.

On Wall Street the Dow closed down 0.11%, the S&P 500 dipped 0.17% and the Nasdaq fell 0.18%.

In early forex trade the dollar bought ¥82.18, compared with ¥81.88 in New York late on Wednesday.

The euro bought $1.3105 and ¥107.70 in early Asian trade, compared with $1.3096 and ¥107.22 in New York.

The single currency extended it recent gains as the European Union cleared an extra two years for Greece to bring its public deficit within formal EU limits, which was part of a deal agreed last month as part of its bailout rearrangement.

The move came a day after Athens launched a debt buyback bid aimed at slicing €20bn from its debt pile.

The Australian Bureau of Statistics said economic growth eased to 0.5% in the three months to September and 3.1% from a year earlier, hit by a slowdown in China but in line with analysts' forecasts.

Treasurer Wayne Swan hailed the "solid" data, saying it was more evidence of "the ongoing resilience of the Australian economy in the face of a difficult and volatile global environment".

In Hong Kong HSBC climbed 1.0% and Ping An of China surged 3.3% after the British lender said it would sell all its 15.6% stake in the insurer to Thailand's Charoen Pokphand Group for $9.4bn.

Oil prices were higher, with New York's main contract, light sweet crude for delivery in January, gaining a cent to $88.51 a barrel and Brent North Sea crude for January also adding a cent to $109.85.

Gold was at $1 701.60 at 03:10 GMT compared with $1 705.44 late on Tuesday.