Asian stocks rise amid hopes of US deal

Signs that US political leaders may be closing in on a budget deal to avoid the so-called “fiscal cliff” boosted Asian stock markets.

Comments by President Barack Obama and Speaker of the House John Boehner that a deal to avoid a budget crisis could be reached before year’s end was enough to boost markets in the face of disappointing US home sales, a critical indicator of whether the economy is improving.

Japan’s Nikkei 225 index rose 0.7% to 9,369.02. Hong Kong’s Hang Seng rose 0.5% to 21,819.35 and South Korea’s Kospi added 0.9% to 1,929.21.

Australia’s S&P/ASX 200 gained 0.5% to 4,486. Benchmarks in Singapore, Taiwan and mainland China also rose.

Mr Obama and the US Congress have until January 1 to agree on how to trim the country’s unwieldy deficit.

Otherwise, a series of automatic tax increases and sharp spending cuts will take effect that could drag the world’s top economy into recession.

Mr Obama said yesterday he believes a “framework” agreement can be reached before Christmas.