The so-called "fiscal cliff" has been dominating news headlines here in the US for weeks. Across the pond, Europeans have been paying close attention and having similar, just as heated, debates about spending and taxes.
Markets breathed a huge sigh of relief Wednesday that U.S. lawmakers finally agreed on a budget deal that will stop hundreds of billions of dollars in automatic tax increases and spending cuts that risked plunging the world's biggest economy into recession.
Stocks around the world started 2013 with hefty gains as investors welcomed the vote in the House of Representatives that made sure that the U.S. does not go over the so-called "fiscal cliff."
Though longer-term fiscal problems remain and President Barack Obama will likely face more battles with the Republican-dominated House, investors were relieved that the biggest near-term stumbling block to the world economy has been cleared.
"Investors are trading with a sense of relief after lawmakers in Washington agreed on a compromise to avoid the fiscal cliff that has been the dominant theme in equity markets since the Presidential elections back in November," said Mike McCudden, head of derivatives at stockbroker Interactive Investor.
In Europe, the FTSE 100 index of leading British shares jumped 2.2 percent to 6,026, its first foray above the 6,000 mark since July 2011. The CAC-40 in France rose 2.4 percent to 3,728 while Germany's DAX was up 2.3 percent at 7,781.
Earlier, in Asia, Hong Kong's Hang Seng index shot up 2.9 percent to close at 23,311.89, its highest finish since June 1, 2011. Australia's S&P/ASX 200 surged 1.2 percent to close at 4,705.90, its best finish in 19 months while South Korea's Kospi jumped 1.7 percent to 2,031.10.
EU-Digest
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