Market News
Gold, stocks upbeat in anticipation of US shutdown deal - REUTERS
By Tom Westbrook
SINGAPORE (Reuters) -Asian stocks rose on Tuesday while gold and the Nasdaq were basking in their sharpest gains for months thanks to signs a deal to end the U.S. government shutdown was in the offing.
Gold jumped nearly 3% overnight and was comfortably above $4,100 in the Asia morning. The Nasdaq rose 2.3% to recover much of the losses inflicted last week by a bout of nerves around the valuation and profitability of AI firms.
South Korea's Kospi was also clawing back last week's falls and advanced 2.1% in early trade, while Japan's Nikkei rose 0.7%. Markets in Hong Kong and China opened higher.
S&P 500 futures tacked on 0.1%.
A deal that would restore U.S. federal funding and end the longest shutdown on record cleared an initial Senate hurdle late on Sunday.
It was unclear when Congress would give its final approval, though, with a few Senate hurdles left to clear before the House can vote on the deal and send it to President Donald Trump.
Prediction markets, such as the online Polymarket, have reopening nearly fully priced in for the end of the week, so the timeline is tight and markets' gains may be vulnerable to delays.
"Markets have reacted positively with a sigh of relief, but it may be too early to pop the champagne," said Vasu Menon, managing director for investment strategy at OCBC in Singapore.
He said the government reopening will lead to the resumption of data publication, which may clear the way to interest rate cuts and is providing extra support for gold prices.
On Wall Street the S&P 500 closed up 1.54% for its biggest one-day percentage gain since mid October and the Nasdaq notched its largest daily gain since May.[.N]
YEN HITS NINE-MONTH LOW
Safe havens such as the Japanese yen and U.S. Treasuries initially retreated, with the mood favouring risk-taking.
The yen was under pressure at 154.49 its weakest level since February. [FRX/]
Bonds, however, recovered some ground as Federal Reserve speakers have been casting doubt on the rate cut that markets are tentatively expecting for December.
Ten-year Treasury yields rose to a high of 4.147% on Monday but finished the session at 4.11%, with traders already starting to look past reopening. The bond market was closed on Tuesday to mark Veterans Day.
"We don't think (reopening is) going to lead to a really sustained selloff in rates, just because it's not like markets had responded that negatively to the shutdown in the first place," said Jack Chambers, senior rates strategist at ANZ in Sydney.
"Markets treated this assuming it (shutdown) was going to end."
(Additional reporting by Gregor Stuart Hunter in SingaporeEditing by Shri Navaratnam)
