Asian Stocks Gain as Congress Passes Deal to End Shutdown

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Asian stocks rose, sending the regional benchmark index toward a five-month high, after the U.S. Congress voted to end the government shutdown and raise the debt ceiling.

Honda Motor Co., which gets about 46 percent of its car sales from North America, gained 1.2 percent in Tokyo. Kansai Electric Power Co. added 2.9 percent after the Japanese utility reported an unexpected first-half profit. Boral Ltd. advanced 6 percent after USG Corp. agreed to pay the Australian company as much as $575 million to create a jointly owned building-materials business spanning Asia and the Middle East.

The MSCI Asia Pacific Index gained 0.8 percent to 142.15 as of 1:20 p.m. in Tokyo, with more than three shares rising for each that fell. The U.S. ended the nation’s fiscal impasse as the Senate and the House of Representatives voted to halt the government shutdown and raise the U.S. debt limit as the deadline loomed today. President Barack Obama said he will immediately sign the agreement.

“Even though it doesn’t change anything, at least for the moment there’s a relief that there will be no U.S. default, at least before the new year,” Toby Lawson, head of futures, options and cash equities for the Asia-Pacific at Newedge Group SA in Sydney, said by telephone. “Investors can now focus on economic fundamentals. Europe is showing reasonable signs that the worst is over and the bearish view on China isn’t playing out.”

China Data

China is scheduled to release a slew of data tomorrow. The world’s second-largest economy may have grown last quarter at the fastest pace this year, according to a Bloomberg survey of economists.

The Shanghai Composite Index climbed 0.5 percent, heading for its first advance in three days. China’s economy probably expanded 7.8 percent in the third quarter year-on-year, after expanding 7.5 percent in the previous three months, according to the median of about 50 estimates in a Bloomberg survey before tomorrow’s data. The nation will also release factory output and retail sales figures for September.

Japan’s Topix (TPX) index gained 0.9 percent, while Taiwan’s Taiex index increased 0.5 percent. Hong Kong’s Hang Seng Index rose 0.2 percent, while Australia’s S&P/ASX 200 Index New Zealand’s NZX 50 Index both added 0.4 percent.

South Korea’s Kospi index advanced 0.3 percent. The nation’s producer prices index dropped 1.8 percent in September from a year earlier, after falling 1.3 percent in August, the Bank of Korea said today.

Singapore Exports

Singapore’s Straits Times Index climbed 0.8 percent. The nation’s exports fell 1.2 percent in September from a year earlier, according to a report by International Enterprise Singapore. Shipments were expected to drop 2.8 percent, according to the median estimate of economists in a Bloomberg survey.

The MSCI Asia Pacific Index gained 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings yesterday, compared with 15.6 for the Standard & Poor’s 500 Index and 14.5 for the Stoxx Europe 600 Index.

S&P 500 futures were little changed today. The equity gauge jumped 1.4 percent toward a record yesterday as the Senate crafted a deal to end the government shutdown and raise the debt ceiling.

The House of Representatives voted 285-144 to clear a measure that now heads to Obama for his signature. The House vote came less than three hours after the Senate passed the bill, 81-18.

Failed Goals

The deal concludes a fiscal standoff that began with Republicans demanding the defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in the agreement.

Pacific Investment Management Co. Co-Chief Investment Officer Bill Gross and BlackRock Inc. Chairman and Chief Executive Officer Laurence D. Fink, who oversee $5.76 trillion, consistently dismissed the likelihood that the U.S. would default should its borrowing authority be allowed to lapse.

Investors should buy three-, four- and five-year Treasuries and inflation-protected securities, Gross said on Bloomberg TV Oct. 1. The government shutdown, which started Oct. 1, will end “very rapidly,” BlackRock’s Fink said Oct. 3 at an event hosted by the UCLA Anderson School of Management in Beverly Hills, California.

 

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