Asian markets cheer US deal to avoid debt default
10/17/2013 1:10:25 PM
An eleventh hour agreement that averted a U.S. government debt default boosted Asian stock markets Thursday. European markets, which rallied the day before in anticipation of a deal, were down.
Gains in Asia were modest. The budget and debt impasse had caused jitters but markets had not sold off severely as investors and analysts largely believed U.S. lawmakers would reach agreement at the last minute, as they did in a previous budget standoff.
After a Senate vote, Congress passed and sent a waiting President Barack Obama legislation late Wednesday night to raise the $16.7 trillion debt limit and end a 16-day partial government shutdown.
Analysts said the deal has soothed immediate worries but didn't deal with the root issue, which will result in another showdown in early 2014.
"The U.S. budget and debt drama appears to be over for now. We have a short-term extension but will likely be in a similar crisis situation early next year," said analysts at Credit Agricole CIB in Hong Kong in a market commentary. "Nevertheless, we expect market tone to improve over the near term."
Gains in Asia were modest. The budget and debt impasse had caused jitters but markets had not sold off severely as investors and analysts largely believed U.S. lawmakers would reach agreement at the last minute, as they did in a previous budget standoff.
After a Senate vote, Congress passed and sent a waiting President Barack Obama legislation late Wednesday night to raise the $16.7 trillion debt limit and end a 16-day partial government shutdown.
Analysts said the deal has soothed immediate worries but didn't deal with the root issue, which will result in another showdown in early 2014.
"The U.S. budget and debt drama appears to be over for now. We have a short-term extension but will likely be in a similar crisis situation early next year," said analysts at Credit Agricole CIB in Hong Kong in a market commentary. "Nevertheless, we expect market tone to improve over the near term."