World Markets Rise on News of US Debt Deal

Posted August 1st, 2011 at 5:10 am (UTC-5)
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European markets opened higher and Asian stocks surged Monday on news that U.S. President Barack Obama and congressional leaders had reached a deal to avert a debt default.

London's Financial Times 100 index, the CAC-40 in Paris, and the DAX in Frankfurt all opened around one percent higher.

Tokyo's Nikkei Index closed up one-and-one-third percent, snapping a three-day losing streak.

Hong Kong markets closed one percent higher, while markets across Asia trended upward. U.S. stocks are expected to rise significantly Monday, after a week of losses.

Gold dropped $11.21 to $1,615.84 an ounce.

Adrian Foster, head of financial markets research at Hong Kong's Rabobank, told VOA there has been a clear relief rally on the news from the U.S., and he sees a rally likely to go through the end of this year.

Stephen Schwartz, chief economist for Banco Bilbao Vizcaya in Hong Kong, told VOA a lot of events still can move the market, but he thinks the tone is now set for a rebound.

Despite the proposed deal, analysts still say rating agencies will likely downgrade U.S. bonds because of the uncertainly of future spending cuts and the general anxiety among investors caused by the debt crisis.

The agreement still must be passed by a deeply divided Congress.