• News
  • SAN DIEGO
  • Finance

Glimmer of hope in US debt talks buoys markets

LONDON (AP) -- Hopes that U.S. politicians will be able to reach a deal on raising the government's debt limit, avoiding the risk of a disastrous default, supported global markets on Monday, when Wall Street will remain closed for a holiday.

Congress must agree by the end of February to increase the limit on how much the U.S. can borrow so the government can service its debt. If it doesn't, the country could default, which would deal a heavy blow to global financial markets and undermine confidence in the world's largest economy.

The Republicans appear ready to raise the debt ceiling temporarily and have also backed away from their insistence on deep spending concessions in exchange for a deal. The signs of compromise encouraged investors to buy into stock indexes, many of which are near multi-year highs.

“Although this again could be seen as another round of political battle, any progress to avoid immediate dangers will likely be seen as positive by the market,” said Gary Yau, analyst at Credit Agricole CIB, in a report to investors.

Britain's FTSE 100 closed Monday up 0.43 percent to 6,180.98 while Germany's DAX had advanced 0.36 percent to 7,729.80. France's CAC-40 ended the day up 0.2 percent to 3,749.79.

U.S. stock and bond markets are closed for Martin Luther King, Jr. Day.

Dickie Wong, executive director of research at Kingston Securities in Hong Kong, said he was optimistic that an agreement on the U.S. debt ceiling would be reached because of the high price tag attached to failing to do so.

“Both parties will find some kind of solution because they all know that the debt ceiling will have to be increased,” Wong said. “At the very last minute, they will sort it out.”

Earlier in Asia, markets were more cautious, with Japanese shares hit hard by a rise in the yen. The Nikkei 225 fell 1.5 percent to close at 10,747.74.

The Bank of Japan began a two-day policy meeting and has been under pressure from the new government to take more aggressive steps to fight the long deflationary slump in the world's third largest economy. Some analysts expect the bank to expand its asset-purchasing program and set an inflation target.

South Korea's Kospi dropped 0.1 percent to 1,986.86. Hong Kong's Hang Seng fell 0.1 percent to 23,590.91. Australia's S&P/ASX 200 rose 0.1 percent to 4,777.50.

In mainland China, the Shanghai Composite Index gained 0.5 percent to 2,328.22 while the smaller Shenzhen Composite Index rose 0.7 percent to 942.50.

In commodity markets, the benchmark oil contract for February delivery was down 50 cents to $95.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 7 cents to finish at $95.56 per barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3301 from $1.3320 late Friday in New York. The dollar fell to 89.49 yen from 90.03 yen.

___

Pamela Sampson in Bangkok contributed to this report.

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

User Response
0 UserComments

Leave Your Comment

Comments are moderated by SDDT, in accordance with the SDDT Comment Policy, and may not appear on this commentary until they have been reviewed and deemed appropriate for posting. Also, due to the volume of comments we receive, not all comments will be posted.

SDDT Comment Policy: SDDT encourages you to add a comment to this discussion. You may not post any unlawful, threatening, defamatory, obscene, pornographic or other material that would violate the law. All comments should be relevant to the topic and remain respectful of other authors and commenters. You are solely responsible for your own comments, the consequences of posting those comments, and the consequences of any reliance by you on the comments of others. By submitting your comment, you hereby give SDDT the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying and other information you provide via all forms of media now known or hereafter devised, worldwide, in perpetuity. SDDT Privacy Statement.

Subscribe Today!