Asian shares have risen in early trading this morning (January 2nd) after the US House of Representatives reached a deal to avoid the so-called fiscal cliff.
Hong Kong advanced to a 19-month high and drove markets higher, as US policymakers passed a bill to prevent massive tax hikes and further austerity measures.
As a result, Singapore's Straits Times Index grew by 1.3 per cent, while financial markets in mainland China and Japan were closed for a public holiday.
The positive data follows fears the fiscal cliff could have hurt demand for Asian exports to the US and affected growth among the world's leading manufacturers and markets.
However, analysts have confirmed the deal – which will see the wealthiest two per cent of citizens pay more taxes – has staved off fears among investors.
Jason Hughes, head of premium client management for IG Markets Singapore, said: "With the final hurdle being passed now, we've got a minimum deal that avoids any immediate threat of the US falling off the cliff."
Learn about the markets and find spread betting tips at City Index.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.