ET:Asian markets up on US fiscal hopes, euro eases
HONG KONG: Asian markets were mixed on Tuesday as confidence that US politicians will agree a deal to avert a fiscal cliff was offset by profit-taking following a recent strong rally.
The decision by Moody's to downgrade French debt staunched a rise in the euro early on but it picked up in the afternoon, stoked by hopes that eurozone leaders will agree to hand Greece its latest batch of bailout cash.
Tokyo, which has risen about five per cent in the past three sessions, ended the day 0.12 per cent lower on profit-taking and after the Bank of Japan held off any new monetary easing measures following a policy meeting.
The Nikkei shed 10.56 points to 9,142.64.
Sydney finished 0.56 per cent, or 24.3 points, higher at 4,385.7 while Seoul was up 0.64 per cent, or 12.08 points, to close at 1,890.18.
Hong Kong fell 0.16 per cent, or 33.78 points, to 21,228.28, while Shanghai eased 0.40 per cent, or 8.06 points, to 2,008.92.
Wall Street provided a strong lead as markets opened for the first time since Republicans and Democrats on Friday pledged to work on a budget that would avoid the fiscal cliff of tax hikes and spending cuts due on January 1 that would tip the economy into recession.
Global shares have tumbled in recent weeks on fears the two parties would not find a compromise but the comments from Congressional leaders have soothed fears.
The Dow climbed 1.65 per cent, the S&P 500 jumped 1.99 per cent and the Nasdaq surged 2.21 per cent.
The rally was also boosted by figures showing that existing home sales rose 2.1 per cent in October from September and home builder confidence improved for a seventh straight month in November.
However, European woes continue to nag. On Monday it was France in the spotlight after Moody's cut its gold-plated AAA credit grade by one notch to "Aa1" and maintained a negative outlook, meaning another downgrade was possible.
It cited the the country's "disproportionately large" exposure to the troubled countries on Europe's periphery. Fellow ratings agency Standard & Poor's made a similar move in January.
In morning European trade the euro bought $1.2800 and 103.98 yen, compared with $1.2778 and $103.99 yen in New York late Monday.
