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June 27, 2017

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Asian markets surge after US averts fiscal cliff

HONG KONG--Asian markets rose sharply on Wednesday after the U.S. Congress backed a deal to avert a fiscal cliff of drastic tax rises and spending cuts in an upbeat start to the year for regional markets.

As the House of Representatives approved the bill, which avoids tax hikes for most Americans and delays automatic spending cuts, investors piled into the embattled euro as the appetite for risk increased and oil prices surged.

Hong Kong was the biggest riser in Asia, adding 2.89 percent, or 655.06 points, to 23,311.98, receiving an additional boost from positive Chinese manufacturing data.

Sydney gained 1.23 percent, or 57 points, to 4,705.9, and Seoul put on 1.71 percent, or 34.05 points, advancing to 2,031.10.

Financial markets in Japan and mainland China were closed for a public holiday.

Asian shares had risen steadily on Wednesday morning in anticipation of a deal in Washington, and raced ahead in the hours after the pact was approved by U.S. lawmakers.

Jason Hughes, head of premium client management for IG Markets Singapore, said the market reaction was "very positive."

"With the final hurdle being passed now, we've got a minimum deal that avoids any immediate threat of the U.S. falling off the cliff ... that's definitely boosted Asian equities markets," he said.

European markets also jumped at the open Wednesday in response to the fiscal cliff deal.

The upbeat start for shares in 2013 will be a relief for investors after the uncertainty that clouded markets in the final months of last year as wrangling over the fiscal cliff dragged on.

Hong Kong's Hang Seng Index was boosted by official data showing that Chinese manufacturing activity expanded in December for a third straight month, further evidence the world's number two economy was picking up after a slowdown.

The official purchasing managers' index stood at 50.6 in December, unchanged from the previous month. A reading above 50 indicates expansion while anything below points to contraction.

The data was released on Tuesday, but the Hong Kong market had been closed for a public holiday.

Gold was at US$1,683.30 at 1115 GMT compared with US$1,658.90 late Friday.

In other markets:

— Manila advanced 0.83 percent, or 48.26 points, to 5,860.99.

Conglomerate Ayala Corp. rose 1.74 percent to 526 pesos, while its property arm Ayala Land Inc was up 0.75 percent at 26.65 pesos.

— Singapore closed up 1.09 percent, or 34.66 points, to 3,201.74.

Agricultural commodities trader Wilmar International gained 5.7 percent to SG$3.53 while Fraser and Neave, the subject of rival takeover bids by Thai and Indonesian tycoons, fell 0.31 percent to SG$9.67.

— Kuala Lumpur fell 0.84 percent, or 14.23 points, to 1,674.72.

Kuala Lumpur Kepong shed 5.5 percent to 22.68 ringgit while Bumi Armada slipped 2.5 percent to 3.88.

— Jakarta rose 0.69 percent, or 29.79 points, to 4,346.48.

Lender Bank Mandiri rose 1.9 percent to 8,250 rupiah and car maker Astra International fell 1.32 percent to 7,500 rupiah.

— Bangkok rose 1.11 percent, or 15.52 points, to 1,407.45.

Coal producer Banpu added 2.43 percent to 422.00 baht, while electricity firm EGCO dropped 2.32 percent to 147.50 baht.

— Mumbai's Sensex index rose 0.68 percent, or 133.43 points, at 19,714.24 points, a 20-month-high.

India's motorcycle maker Bajaj Auto rose 3.32 percent to 2,208 rupees and the largest passenger carmaker Maruti Suzuki rose 3.23 percent to 1565 rupees.

— Wellington was closed for a public holiday.

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