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| Tokyo jumped 1.94 percent in the afternoon, Hong Kong rose 1.51 percent in the morning and Sydney added 1.97 percent, while Seoul gained 1.75 percent and Taipei climbed 0.45 percent. Shanghai edged 0.15 percent higher. |
However, the bill must still pass through both houses of Congress, and Obama urged lawmakers “to do the right thing and support this deal”.
Traders worldwide have been on edge for weeks as the White House and Democrats squabbled with Republicans over how to make enough budget cuts to allow a hike in the debt limit.
A default by the United States, the world’s richest country, would send shudders through the global economy that could lead to another financial crisis.
The news briefly lifted the dollar — after a steady sell-off last week as Democrats and Republicans struggled to come to an agreement — but it soon eased back.
The greenback, which rose above the 78 yen level after the deal, was at 77.50 yen in Tokyo afternoon trade, down from 76.73 yen in New York late Friday.
The euro fetched $1.4391 against $1.4395. The European single unit rose to 111.51 yen from 110.41 yen.
“The debt-ceiling issue had been disturbing the market and spawned risk aversion since last week,” noted Kazuhiro Takahashi, a general manager of investment strategy and research at Daiwa Securities.
“As President Obama announced a deal, lost ground is being regained,” he said.
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 United States last week showed stagnant growth in the first half of 2011, raising fresh concerns of a recession.
The Commerce Department said gross domestic product grew only 1.3 percent in the second quarter, after 0.4 percent in the first, the weakest growth since the economy officially exited recession two years ago.
Both numbers were much lower than earlier forecasts — originally first-quarter growth had been put at 1.9 percent — and raised doubts about widespread forecasts of a 3.0 percent-plus pace for the rest of the year.
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 Shanghai stocks were muted after HSBC said its purchasing managers’ index fell to 49.3 in July from 50.1 in June, showing manufacturing activity in China contracted for the first time in a year, due to Beijing’s efforts to slow the economy as well as weakening overseas.
That came after the official index released earlier Monday showed activity slowed for the fourth straight month in July to 50.7 from 50.9 in June — the lowest in more than two years.
Oil rallied on the debt deal announcement. New York’s main contract, light sweet crude for delivery in September, surged $1.53 to $97.23 per barrel. Brent North Sea crude gained $1.25 to $117.99.
Gold opened in Hong Kong at $1,612.00-$1,613.00 an ounce, unchanged from Friday’s finish.
