Global markets have responded positively to the US 'fiscal cliff' deal of spending cuts and tax rises.
- The FTSE 100 Index saw a rise of 1.5% up 93 points to 5990.
- Hong Kong's Hang Seng index jumped by more than 2% to its highest level in 18 months.
- South Korea's Kospi rose by 1.7%
- Australia's ASX 200 rose 1.2%.
Economists had feared that, without action by Congress, the tax increases and spending cuts that technically took effect on New Year's Day would cause unemployment to surge and send the US economy back into recession.
America's financial crisis has been averted, not solved. We've had the fiscal cliff. Now get ready for the debt abyss.
Democrats and Republicans have so far failed to agree on an alternative plan to the tax increases and spending cuts scheduled for January 1.