Asian shares rise on fiscal cliff deal

<p>Asian shares have risen on news the US has reached a deal to avoid the fiscal cliff. </p>

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."

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