World financial markets jumped Wednesday after
US lawmakers agreed on a deal to head off massive austerity measures,
but analysts warned of the risk of renewed volatility as Congress and
President Barack Obama gird for a looming debt ceiling clash.
Shares on Wall Street closed sharply higher, after a relief rally
in Asia and Europe following the US House of Representatives'
approval of a bill to avoid across-the-board income tax hikes and
postpone spending cuts that risked triggering a recession.
New York's Dow Jones Industrial Average rose 2.35 per cent, and
Europe's benchmark Stoxx 600 index climbed more than 2 per cent.
The Standard & Poor's 500 Index was up 2.54 per cent to score its
biggest gain in more than a year. The technology-heavy Nasdaq
Composite Index rose 3.07 per cent.
Stocks in Asia posted strong gains, spearheaded by a 2.9-per-cent
rise in Hong Kong.
"Although politicians have handled the most imminent threat to
growth, political uncertainty will persist over the coming months,"
Danske Bank analyst Signe Roed-Frederiksen said.
"US fiscal policy remains on a non-sustainable path," said
Commerzbank Bank economist Christoph Balz. "The compromise does not
tackle structural challenges such as tax reform and the growing
claims for social security."
The relief among investors helped Europe's biggest share market in
London top 6000 for the first time since July 2011, after climbing by
more than 2 per cent.
Stocks in Paris chalked up gains topping 2 per cent, while
Frankfurt climbed more than 2 per cent to a five-year high of 7789.
Hopes that the US economy will continue on a growth track pushed
the oil price up 1.2 per cent to 92.95 dollars, while the euro rose
0.4 per cent to 1.3257 dollars.
Hong Kong's Hang Seng Index closed above 23,000 for the first time
since June 2011 following the vote in Washington.
In Sydney, the S&P/ASX 200 index advanced 1.2 per cent to
4,705.94, while South Korea's Kospi Index finished the day up 1.7 per
cent at 2,031.1.
Singapore's Straits Times Index closed 1.1-per-cent higher at
3,201.74.
Stock markets in Japan and mainland China were closed for a
holiday.
