Asian Stock Markets

August 1, 2011 by staff 

Asian Stock MarketsAsian Stock Markets, Asian stocks rose as the White House and congressional leaders announced they had finally reached a bipartisan agreement to increase the country’s debt limit, avoiding the possibility of a U.S. default two days before a deadline for a deal.

Japan’s Nikkei 225 index, which includes major Japanese companies, rebounded 1.83 percent in early trading in Tokyo on Monday after opening 0.75 percent. Standard & Poors 500/ASX 200 index, a measure of blue-chip stocks in Australia, rose 1.95 percent after opening 0.36 percent before the announcement.

Singapore’s benchmark Straits Times Index began trading up 0.77 percent, while the benchmark KOSPI of South Korea climbed 1.69 percent and Hong Kong’s Hang Seng index moved 1.49 per percent.

“The price reaction today is very strong,” said Koji Ochiai, chief market economist at Mizuho Investors Securities in Tokyo.

The demonstrations came on the heels of an announcement by President Obama said Sunday that congressional leaders had reached a bipartisan agreement to increase the country’s debt limit and reduce spending, following the directions above for the majority of the Senate, Harry M. Reid (D-Nev.) that an agreement was in place.

Not all markets were in the news. Shanghai Stock Exchange composite index started the day up 0.33 percent.

Butanlysts said the discovery was a great blessing for Asian markets, which had been driven by the growing uncertainty about whether an agreement would be reached in time.

“There was nothing really moves the market weakness,” said Savanth Sebastian, an equities economist at Commonwealth Bank of Australia in Sydney. He said the talks of U.S. debt have been the “dominant factor” for the stock market in Australia, which ended in July for a month in a row.

Global markets have been closely following the debate on the U.S. debt limit the crucial role that U.S. Treasury bonds play in all types of financial transactions. If an agreement was not reached on Tuesday, the United States have faced a possible bankruptcy, which would have been riskier to hold Treasury bonds and caused turmoil in global financial markets that depend on them as a safe value.

The uncertainty about a deal struck last week’s markets, the reduction of major stock markets in Asia and eventually flowing through the United States, where the Dow Jones industrial average and Standard & Poor s 500 $ The country’s two main stock index, stock market recorded its worst week in more than one year.

But next week could reverse those losses. The news of an agreement on debt negotiations sent futures contracts on the Dow Jones Industrial Average, the Standard & Poor 500 and the Nasdaq more than 1 percent of Sunday night, indicating that traders more optimistic about market prospects.

Investors also pulled out of the safe bets they had made last week after talks broke down debt and an agreement seems less likely. Gold, long considered a safe value in turbulent times, down 1 percent, to 1613.15 and the troy ounce, leaving behind the highest rated of all time that hit on Friday.

Another positive sign was the strengthening of the dollar against major currencies several, including a 0.96 percent against the Swiss franc and 1.15 percent against the Japanese yen, which many investors consider safety work in turbulent times.

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