- POSTED: 11 Oct 2013 16:53
- UPDATED: 11 Oct 2013 19:56
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Asian markets on rallied Friday on hopes that the US will avoid a default as President Barack Obama and Republican leaders held their first talks on resolving a budget impasse that triggered a partial government shutdown.
HONG KONG: Asian markets on rallied Friday on hopes that the US will avoid a default as President Barack Obama and Republican leaders held their first talks on resolving a budget impasse that triggered a partial government shutdown.
The gains followed Wall Street's best day since January as dealers welcomed progress on ending the crisis with less than a week before Washington runs out of cash to pay its bills.
Tokyo rose 1.48 per cent, or 210.03 points, to 14,404.74, Sydney climbed 1.63 per cent, or 83.8 points, to 5,230.9, while Seoul was 1.17 per cent higher, adding 23.50 points to 2,024.90.
Shanghai was up 1.70 per cent, or 37.22 points, at 2,228.15 and Hong Kong advanced 1.16 per cent, or 267.02 points, to 23,218.32.
After 10 days of deadlock, Republicans proposed to extend the US borrowing limit for six weeks in return for an agreement by Obama to negotiate on a budget that would restart federal operations.
The White House said Obama would be open to a short-term debt ceiling hike.
Following 90 minutes of talks at the White House, Republican second-in-command Eric Cantor offered an upbeat report, despite no deal yet being struck, telling reporters: "It was a very useful meeting, we had a constructive conversation."
He said both sides would consult aides and continue discussions later on Thursday.
While a deal to raise borrowing would postpone a devastating default - which economists warn would likely spark another global recession - it would not end the government shutdown, which began on October 1.
Jack Ablin, chief investment officer at BMO Private Bank, said the developments suggest "both sides appreciate the gravity of a default".
He added: "It's not worth sending our country into a tailspin over ideological differences. I think investors are breathing a sigh of relief."
Thursday's events helped Wall Street shares enjoy their best day since the beginning of the year, when lawmakers agreed on a deal to avoid the fiscal cliff of tax hikes and government spending cuts.
The Dow surged 2.18 per cent to 15,126.07, just below its level on the eve of the October 1 shutdown. The S&P 500 jumped 2.18 per cent and the Nasdaq added 2.26 per cent.
And in currency trade, the dollar edged back up against the yen after falling to six-week lows earlier in the week.
The greenback bought 98.30 yen in afternoon trade, up from 97.91 yen in New York late Tuesday.
The euro bought US$1.3559 and 133.31 yen against US$1.3526 and 132.58 yen.
On oil markets, New York's main contract, West Texas Intermediate (WTI) for delivery in November, was down 27 cents at US$102.74 in afternoon trade, while Brent North Sea crude for November eased 26 cents to US$111.54.
Gold cost US$1,290.30 at 0800 GMT compared with US$1,301.79 on Thursday.
In other markets, Taipei was flat, edging up 4.64 points to 8,349.37; Jakarta ended up 0.74 per cent, or 33.23 points, at 4,519.91; Kuala Lumpur gained 9.83 points, or 0.55 per cent, to 1,785.75; Wellington rose 0.50 per cent, or 23.39 points, to 4,740.77; Mumbai rose 1.26 per cent or 255.68 points to 20,528.59; Bangkok gained 0.40 per cent or 5.87 points to 1,457.78; and Manila closed 0.84 per cent higher, adding 53.83 points to 6,489.80.