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Asia stocks inch up though U.S. fiscal concerns weigh; Nikkei up 0.03%

Published 11/13/2012, 10:36 PM
Updated 11/13/2012, 10:38 PM
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Investing.com - Asian stocks rose on Wednesday after investors ditched safe-haven currency positions to take on risk, though market participants kept a close eye on the U.S.,  which risks falling into an avoidable recession next year if fiscal issues aren't tackled very soon.

During Asian trading on Wednesday, Hong Kong's Hang Seng Index was up 0.62%, Australia's S&P/ASX200 was up 0.19%, while Japan’s Nikkei 225 Index was up 0.03%.

At the end of this year, the Bush-era tax cuts and other tax benefits expire at the same time pre-programmed cuts to government spending are scheduled to take effect, a combination known as a fiscal cliff that could send the country into recession next year if left unaddressed by Congress.

If untreated, the fiscal cliff could siphon over USD600 billion out of the U.S. economy next year alone in the form of rising taxes and cuts to government spending.

Lawmakers have expressed confidence that they'll avoid partisan bickering and cut a deal, but until an announcement hits the wire, investors will remain wary.

Fears the fiscal cliff will roil markets worldwide eased off on Wednesday, giving investors confidence to snap up nicely priced shares.

A slumping dollar stemming from hopes Greece will receive its next tranche of bailout money lifted spirits in Asian bourses and fueled demand for risk as well.

German newspaper Bild reported that Greece could receive EUR44 billion in various financial aid packages bundled together in one lump sum, citing German government sources.

The news enticed investors out of safe-haven dollar positions on hopes Greek solvency woes will abate for now.

The Greek government recently approved a new budget and a string of austerity measures to appease creditors, though eurozone policymakers have yet to disburse aid, which kept investors parked in safe-haven positions in recent sessions, weakening major currencies across the globe.

Eurozone policymakers are scheduled to meet again to discuss Greece's finances on Nov. 20, with a EUR31.5 billion tranche of aid pending approval.

Meanwhile, Greece placed EUR4.06 billion in short-term government debt earlier, money that will help Athens to repay EUR5 billion in debt maturing on Friday, and hopes began to build that policymakers will free up pending aid for Athens throughout the session.

In Hong Kong, top gainers included CHALCO, up 2.48%, Li & Fung, up 2.27%, and ICBC, up 2.02%.

In Australia, top gainers included Mirabela Nickel, up 7.69%, CSR Ltd., up 6.11%, and Goodman Fielder, up 3.51%.

European stock futures indicated a mixed opening.

France's CAC 40 futures pointed to a loss of 0.04%, while Germany's DAX 30 futures pointed to a gain of 0.20%. Meanwhile in the U.K., FTSE 100 futures were up 0.17%.

Dow Jones Industrial Average futures were up 0.31%, while the S&P 500 futures were up 0.34%.

Later Wednesday, Australia is to release private sector data on consumer sentiment, as well as a government report on the wage price index, a leading indicator of consumer inflation.

Investors everywhere will be watching for eurozone industrial output figures and U.S. retail sales data due out later in the day as well.









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