Asian markets higher, lifted by US hopes

HONG KONG - Asian markets rose Wednesday on hopes for progress in talks in Washington aimed at avoiding the fiscal cliff, while Chinese shares surged as they bounced back from four-year lows.

Data showing Australian growth remained buoyant provided some support, while the dollar and euro remained on a high against the yen on expectations of new monetary easing by the Bank of Japan.

Tokyo ended 0.39 per cent, or 36.38 points, up at 9,468.84, Sydney was 0.37 per cent, or 16.8 points, higher at 4,520.4 and Seoul climbed 0.61 per cent, or 11.86 points, to 1,947.05.

Hong Kong added 2.16 per cent, or 470.94 points, to end at 22,270.91, while Shanghai surged 2.87 per cent, or 56.77 points, to 2,031.91 after this week hitting its lowest level since January 2009. Dealers were also lifted by speculation that the Chinese government will soon unveil new plans for the economy.

As Republicans and Democrats trade barbs, talks in Washington remain gridlocked just weeks before the package of huge tax hikes and spending cuts is due to take effect on January 1, which would likely tip the US into recession.

On Tuesday President Barack Obama warned Republicans that there would be no deal without them agreeing to raise taxes on the rich, a stand they have made clear they are loathe to budge from.

But he offered a hint of wiggle room, declining to state that the top income tax rate must go up and permanently remain at the 39.6 per cent level seen under the Clinton administration.

"We have the potential of getting a deal done," Obama told Bloomberg TV, adding that Republican proposals to close loopholes and cap deductions would not produce sufficient revenue to make a serious cut in the deficit.

On Wall Street the Dow closed down 0.11 per cent, the S&P 500 dipped 0.17 per cent and the Nasdaq fell 0.18 per cent.

In afternoon forex trade the dollar bought 82.24 yen, compared with 81.88 yen in New York late on Wednesday.

The euro bought $1.3120 and 107.91 yen, compared with $1.3096 and 107.22 yen in New York.

Investors have moved to sell the yen since November when Shinzo Abe, the man expected to become Japan's prime minister after this month's election, said he would push the central bank to carry out more aggressive monetary easing measures.

The single currency was also able to extend its recent gains as the European Union cleared an extra two years for Greece to bring its public deficit within EU limits, which was part of a bailout rearrangement deal agreed last month.

The move came a day after Athens launched a debt buyback bid aimed at slicing 20 billion euros from its debt pile.

Australia said economic growth eased to 0.5 per cent in the three months to September and 3.1 per cent from a year earlier, hit by a slowdown in China, but in line with forecasts and soothing worries it could be headed for a hard landing.

Treasurer Wayne Swan hailed the "solid" data, saying it was more evidence of "the ongoing resilience of the Australian economy in the face of a difficult and volatile global environment".

In Hong Kong HSBC climbed 1.65 per cent and Ping An of China surged 5.29 per cent after the British lender said it would sell all its 15.6 per cent stake in the insurer to Thailand's Charoen Pokphand Group for $9.4 billion.

Oil prices were higher, with New York's main contract, light sweet crude for delivery in January, gaining 54 cents to $89.04 a barrel and Brent North Sea crude for January also adding 56 cents to $110.40.

Gold was at $1,701.65 at 1105 GMT compared with $1,705.44 late on Tuesday.

In other markets:

Singapore's Straits Times Index closed up 0.45 per cent, or 13.80 points, at 3,075.92.

Olam International sank 5.31 per cent to Sg$1.52 while City Developments added 1.80 per cent to Sg$11.87.

Taipei rose 0.63 per cent, or 48.07 points, to 7,649.05.

Smartphone maker HTC rose 1.62 per cent to Tw$283.0 while chip giant TSMC was 0.31 per cent higher at Tw$96.9.

Manila eased 0.33 per cent, or 18.56 points, to 5,687.72.

SM Prime fell 3.6 per cent to 16.00 pesos, BDO Unibank added 1.9 per cent to 73.40 pesos and Megaworld was up 2.3 per cent at 2.68 pesos.

Wellington fell 0.21 per cent, or 8.45 points, to 4,007.25.

Fletcher Building lost 0.8 per cent to NZ$7.85, Fonterra shed 2.2 per cent to NZ$6.60 and Chorus rose 0.4 per cent to NZ$2.79.

Kuala Lumpur shares edged up 6.18 points, or 0.38 per cent, to close at 1,613.79.

UEM Land Holdings gained 2.4 per cent to 2.13 ringgit, while British American Tobacco rose 1.9 per cent to 57.70. Tenaga Nasional lost 0.1 per cent to 6.94 ringgit.

Jakarta ended up 17.19 points, or 0.4 per cent, at 4,286.84.

Paper maker Pabrik Kertas Tjiwi Kimia rose 6.25 per cent to 2,125 rupiah, retailer Ramayana Lestari Sentosa climbed 3.85 per cent to 1,350 rupiah, while food manufacturer Indofood Sukses Makmur slid 1.67 per cent to 5,900 rupiah.

Mumbai's Sensex index rose 0.23, or 43.74 points, to 19,391.86 points.

Tata Motors was up 1.33 per cent at 274.90 rupees and Infosys was down 1.94 per cent at 2,382.30 rupees.

Bangkok was closed for a public holiday.