Stocks rise ahead of cliff talks
Published 28/12/2012 | 04:44
Asian stock markets rose, hours before US President Barack Obama and key politicians were to meet at the White House to try to hammer out an 11th-hour budget compromise to avert the so-called fiscal cliff.
Politicians have until Monday night to agree a budget deal before hundreds of billions of dollars in automatic tax increases and deep cuts to government spending kick in.
Such a drastic reshuffling of money could throw the US into another recession, economists have warned.
Failure to avoid the fiscal cliff does not necessarily mean tax increases and spending cuts would become permanent, since the new Congress could pass legislation cancelling them retroactively after it begins its work next year.
Japan's Nikkei 225 index marched higher, hitting its highest level since March 20, 2011. The Tokyo benchmark rose 0.8% to 10,403.01.
Investors have been cheering newly named Japanese prime minister Shinzo Abe and his calls for more public works spending to reinvigorate the economy.
He also wants the Bank of Japan to raise its inflation target from 1 to 2% to drag the country out of two decades of deflation, or steadily declining prices that have deadened economic activity.
Hong Kong's Hang Seng rose less than 0.1% to 22,653.86, while South Korea's Kospi added 0.3% to 1,993.48. Australia's S&P/ASX 200 gained 0.6% to 4,675.40.