Asia Roundup: Marts soar on US debt deal

HONG KONG: Asian stock markets surged yesterday after US President Barack Obama said lawmakers had reached a last-minute deal that would raise the country's debt ceiling and avoid a catastrophic default.

In Tokyo, the benchmark Nikkei-225 index gained 131.98 points to 9,965.01, after temporarily topping the psychologically important 10,000 mark.

Seoul gained 1.83 per cent, or 39.10 points, to 2,172.31 while Sydney finished 1.65 per cent, or 73.2 points, up at 4,497.8.

Shanghai's composite index ended up 2.05 points, or 0.08 per cent, at 2,703.78

The US deal will raise the country's US$14.3 trillion debt ceiling by about US$2.4 trillion in two steps, while calling for roughly the same amount in spending cuts over 10 years. However, the bill must still pass through both houses of Congress

"The debt-ceiling issue had been disturbing the market and spawned risk aversion since last week," said Kazuhiro Takahashi, a general manager of investment strategy and research at Daiwa Securities.

"As President Obama announced a deal, lost ground is being regained."

However, he sounded a note of caution, adding: "This is not a factor that makes investors picture higher growth for the US economy. The market is reacting to the fact that what should have been settled earlier has finally been done so after a political game."

Analysts also pointed out that data from the US last week showed stagnant growth in the first half of 2011, raising fresh concerns of a recession.

Eyes will be on the release on Friday of key non-farm payroll figures, with concerns that the economy is coming to a halt.

In other markets:

* Taipei rose 0.66 per cent, or 57.20 points, at 8,701.38.

* Manila closed 1.04 per cent, or 46.90 points, higher at 4,550.53.

* Jakarta gained 1.52 pe rcent, or 62.64 points, to 4,193.44.

* Bangkok rose 0.94 per cent or 10.61 points to 1,144.14.

* Mumbai rose 0.64 per cent, or 117.13 points, to 18,314.33. - AFP