{{Asian stocks rose nearly two percent to hit a five-month high and the dollar fell as both houses of Congress passed a bill to end the “fiscal cliff” crisis that threatened a U.S. recession and roiled world financial markets.}}<\/p>\n
European markets were set to rally on the news, with spreadbetters expecting London’s FTSE <.ftse> to rise about 1 percent and Frankfurt’s DAX <.gdaxi> to open up 0.5 percent.<\/p>\n
The Congress approved extending lower Bush-era tax rates to all but the nation’s wealthiest households in a budget deal that stopped automatic implementation of $600 billion in spending cuts and tax increases.<\/p>\n
The bill’s passage in Congress allayed earlier concerns over complaints from a number of Republicans that spending cuts were still not adequately addressed.<\/p>\n
The temporary reprieve that the deal offers the U.S. economy also sets up Wall Street for a strong start to trading which resumes later in the day.<\/p>\n
Asian stock markets cheered the developments as a major risk for investors, namely a slump in the global economy, appeared to have receded for now.<\/p>\n
“This is great news for global growth and explains why shares and other growth-related assets such as the Australian dollar are up strongly today,” said Shane Oliver, strategist at AMP Capital.<\/p>\n
Australian shares <.axjo> rose to a 19-month high while the Aussie dollar jumped to 1.4082.<\/p>\n
The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> rose 1.9 percent. Chinese shares in Hong Kong <.hsce> jumped 3 percent as last month’s rally spilled over into the new year with stocks closely linked to China’s economy such as steel and cement posting the biggest gains.<\/p>\n
In South Korea, where data showed manufacturing activity rose for the first time in seven months in December, the KOSPI index <.ks11> was up 1.6 percent led by a 3.6 percent jump in smartphone giant Samsung Electronics .<\/p>\n
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