Asian shares moved higher Thursday, mirroring European and U.S. stock surges overnight, as sentiment got a boost after one of the senior lawmakers from U.S. stated that he was hopeful about arriving on the budge deal ahead of the year end to avoid the impending fiscal crisis. The broadest index of Asia-Pacific shares of MSCI outside Japan(.MIAPJ0000PUS) moved higher 0.2%, after easing 0.3% on Wednesday, thus ending the winning streak of 7 days.
Nikkei stock average of Japan(.N225) opened 0.7% higher. (.T) Shares of South Korea(.KS11) opened at 0.5%. Shares of Australia (.AXJO) crawled up 0.3%, mainly because of the support coming from the banks, but the stocks of big resources looked mixed.
Equities in U.S. jumped overnight right after John Boehner, the speaker of House of Representatives in U.S., indicated optimism regarding the Republicans brokering the deal with White House in order to avert the year end measure of austerity. President Obama later said that he was hopeful of reaching an agreement before the festive time of Christmas to avert the fiscal cliff of tax hikes and expenditure cuts that value $600 billion and is due to begin in 2013 and is aimed at making the deficit in budget even smaller.
Cho Byung-hyun, one of the analysts from Tong Yang Securities said that global stocks recently looked like focusing on one single issue, which was nothing but the fiscal cliff in U.S. The market players continue to be wary of lack of specific information about how the two opposing parties have planned to reach a compromise and seal the deal.
The sentiment has improved on encouraging comments, indicating nervousness that in case the lawmakers in U.S. fail to arrive on a deal, they would risk pushing the economy of U.S. into recession, further dragging down the global growth. The economy of U.S. was mostly on a steady recovery pace in last few weeks, as per a report coming from Federal Reserve. The report stated that hiring continued to remain modest, but it could calm down the concerns regarding high unemployment and slower growth.
Other data coming from U.S. on Wednesday showed the sales of new homes of single family going down slightly in the month of October and government sharply lowered the estimates for the sales in the month of September, thus denting optimism surrounding the recovery in housing market.