Asian stocks gain as US lawmakers reach bipartisan deal to end 40-day government shutdown, boosting investor sentiment across the region
HONG KONG: Asian markets climbed Monday amid growing optimism that US lawmakers had reached a deal to end the record-breaking 40-day government shutdown.
Reports from CNN and Fox News indicated senators had agreed on a bipartisan stopgap measure to fund operations through January after resolving disputes over healthcare subsidies, food benefits and federal employee firings.
US President Donald Trump told reporters “it looks like we’re getting close to the shutdown ending” ahead of a procedural vote scheduled for Sunday.
The potential resolution would restore funding for food stamps, reverse Trump’s dismissals of thousands of federal workers and ensure a vote on extending healthcare subsidies.
National Australia Bank’s Rodrigo Catril noted “a growing sense of urgency to reach a compromise” as economic consequences mounted.
The Congressional Budget Office estimated the shutdown could reduce quarterly GDP growth by 1.5 percentage points by mid-November.
Tokyo’s Nikkei 225 jumped 1.0% while Hong Kong’s Hang Seng Index gained 0.5% in morning trading.
Shanghai, Sydney, Seoul, Taipei and Manila also posted gains, though Singapore and Wellington recorded losses.
The government reopening would allow officials to resume releasing key economic data, including labour market figures crucial for Federal Reserve rate decisions.
Traders have relied on private data, with a Challenger, Gray & Christmas report showing US layoffs hit a 22-year high in October.
Pepperstone’s Chris Weston said markets currently price a 67% chance of a December rate cut.
Recent comments from Fed members Beth Hammack and Lorie Logan suggested they wouldn’t have supported October’s cut, indicating a higher bar for additional easing.
The prospect of ending the shutdown helped temper concerns about extended tech valuations and potential AI bubble risks following this year’s strong rally. – AFP
