Asian Stocks Rise Amid Signs U.S. May Broker Deal on Debt

by **Cals** Tue 15 Oct 2013, 09:17

Asian Stocks Rise Amid Signs U.S. May Broker Deal on Debt
By Jonathan Burgos - Oct 15, 2013 8:55 AM GMT+0800

Asian stocks rose, with the regional index heading for a five-month high, as Senate leaders said they’re optimistic they will forge a deal to reopen the U.S. government and avoid a breach of the debt limit this week.

Canon Inc., the world’s biggest camera maker, climbed 1.1 percent in Tokyo. Rio Tinto Group (RIO), the second-largest mining company, gained 1.7 percent in Sydney as copper futures advanced. Hankook Tire Co., South Korea’s No. 1 tiremaker, added 1.6 percent after announcing plans to build its first factory in the U.S.

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A pedestrian looks at an electronic stock board outside a securities firm in Tokyo. Japan’s Topix index rose 0.6 percent. Photographer: Tomohiro Ohsumi/Bloomberg

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5:45

Oct. 11 (Bloomberg) -- Simon Grose-Hodge, head of investment strategy for Asia at LGT Group, talks about the impact of the U.S. debt ceiling impasse and Federal Reserve monetary policy on global financial markets. He speaks with John Dawson on Bloomberg Television' "On the Move." (Source: Bloomberg)
The MSCI Asia Pacific Index advanced 0.4 percent to 141.41 as of 9:53 a.m. in Tokyo, before markets open in Hong Kong andChina. Senate Majority Leader Harry Reid said “tremendous progress” had been made, though “we are not there yet.” Leaders are working on an deal to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15, a person familiar with the talks said, speaking on the condition of anonymity.
“It looks like the door is now open for compromise,” Nader Naeimi, Sydney-based head of dynamic asset allocation at AMP Capital Investors Ltd., which manages about $130 billion, told Bloomberg TV. “The deadline is nearing and we’ll get through that. The volatility caused by this debt ceiling debate will be with us until next year.”
Regional Gauges
Japan’s Topix (TPX) index rose 0.6 percent and South Korea’s Kospi index gained 1.1 percent. New Zealand’s NZX 50 Index added 0.1 percent. Markets in Singapore, Indonesia, Malaysiaand the Philippines are shut for holidays.
Australia’s S&P/ASX 200 Index advanced 1 percent. The nation’s central bank repeated it retains the option of reducing interest rates as policy makers gauge the impact of “substantial” stimulus on the economy, minutes of its Oct. 1 meeting showed.
The MSCI Asia Pacific Index climbed 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings on Oct. 11, compared with 15.4 for the Standard & Poor’s 500 Index and 14.3 for the Stoxx Europe 600 Index.
S&P 500 Index (SPX) futures added 0.2 percent today. The gauge rose 0.4 percent yesterday amid signs lawmakers may reach a deal before the government loses its ability to borrow money.
President Barack Obama postponed a meeting with congressional leaders to give lawmakers more time to reach an agreement. Senate Minority Leader, Republican Mitch McConnell, said he shares Reid’s optimism after talks in Washington.
Senate Delays
The possible deal could face procedural delays in the Senate and an uncertain path in the Republican-controlled House of Representatives, where Speaker John Boehner would have to decide whether to allow a vote or make changes. Should Congress fail to act, the U.S. government would run out of borrowing authority in two days and start missing debt payments sometime between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
“It’s positive to see that they’re negotiating and trying to come out with some form of a deal,” said Timothy Radford, a Sydney-based strategist at brokerage Rivkin Securities. “We should probably get some deal by Thursday. That should provide some buying support for the market.”
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