Reuters: US Dollar Report: GLOBAL MARKETS-Asian shares up on hopes of U.S. budget deal

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GLOBAL MARKETS-Asian shares up on hopes of U.S. budget deal Nov 29th 2012, 00:35 Wed Nov 28, 2012 7:35pm EST * US optimism of fiscal deal boosts markets * MSCI Asia ex-Japan inches up, Nikkei opens up 0.7 pct * Euro steadies vs dollar, dollar up vs yen By Chikako Mogi TOKYO, Nov 29 (Reuters) - Asian shares edged higher on Thursday, mirroring U.S. and European stock rises overnight, as sentiment improved after a senior U.S. lawmaker said he was "optimistic" on reaching a budget deal before the end of the year to avoid a fiscal crisis. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent, after easing 0.3 percent on Wednesday ending a seven-day winning streak. Japan's Nikkei stock average opened 0.7 percent higher. South Korean shares opened up 0.5 percent. Australian shares inched up 0.3 percent, supported by banks, but big resource stocks were mixed. U.S. equities jumped overnight after U.S. House of Representatives Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avoid year-end austerity measures. President Barack Obama later said he hoped an agreement can be reached before Christmas to avoid a "fiscal cliff" of tax increases and spending cuts worth $600 billion due to start in the new year and aimed at shrinking the budget deficit. "Global stocks have recently tended to focus on one issue, which is the U.S. fiscal cliff," said Cho Byung-hyun, an analyst at Tong Yang Securities. Market players remain wary of a lack of specifics on how the two major political parties plan to arrive at a compromise. But sentiment has tended to improve on positive comments, reflecting nervousness that if U.S. lawmakers fail to strike a deal, they risk pushing the U.S. economy into recession and dragging down global growth. The U.S. economy was generally on a "measured" pace of recovery in recent weeks, according to a Federal Reserve report. Hiring remained modest, said the report, but it failed to calm concerns about slow growth and high unemployment. Other U.S. data on Wednesday showed that new single-family home sales fell slightly in October and the government revised sharply lower its estimate for September sales, denting optimism over the housing market recovery. Asia's growth prospects remain mixed, with economies such as Indonesia and the Phlippines underpinned by healthy domestic demand and economies such as South Korea and Japan dragged down by sluggish domestic demand and falling exports. A key South Korean manufacturing business survey showed on Thursday its index for December fell to match a more than 3-year low, with companies citing economic uncertainties. China's economy appears to have emerged from its lows but the outlook is uncertain. The Shanghai Composite Index fell to its lowest in nearly four years as growth-sensitive sectors sank, extending losses after closing on Tuesday below 2,000 points for the first time since January 2009. Analysts and traders have said market moves were likely to be increasingly dictated by year-end position adjustments as hedge funds close their books, limiting both the upside and the downside for most assets. The euro was steady around $1.2950 after peaking at $1.3010 on Tuesday, its highest level since Oct. 31, on news of a deal on Greece's debt reduction plan paved the way for further aid to prevent Athens' from an imminent default. The dollar was up 0.1 percent to 82.14 yen. U.S. crude futures rose 0.2 percent to $86.62 a barrel. Spot gold was up 0.2 percent to $1,722.11 an ounce after slumping 1.5 percent on Wednesday for its biggest one-day drop in nearly a month when deflation worries related to a U.S. fiscal crisis and debt-stricken Greece triggered a heavy bout of stop-loss orders from momentum-driven fund investors. Link this Share this Digg this Email Reprints

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