Asia stocks climb on U.S. fiscal cliff optimism; Nikkei ends up 1%

Investing.com - Asian stock markets were broadly higher during late Asian trade on Thursday, as market sentiment was boosted amid optimism U.S. lawmakers will reach a deal to avert the looming fiscal cliff crisis before the January 1 deadline.

During late Asian trade, Hong Kong's Hang Seng Index rose 0.8%, Australia’s ASX/200 Index settled 0.7% higher, while Japan’s Nikkei 225 Index rallied 1%.

Markets participants continued to monitor developments surrounding the upcoming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.

U.S. markets reversed declines on Wednesday after President Barack Obama said he believes a "framework" for an agreement can be reached before Christmas.

Separately, House Speaker John Boehner said that he remained hopeful Republicans could forge an agreement with the White House to avert the budget crisis.
 
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the five weeks left before the January 1 deadline.

In Tokyo, the Nikkei rebounded from the previous session’s one-week closing low, as exporters regained strength after the U.S. dollar regained the JPY82 level.

The Nikkei has rallied 7.5% in the past two weeks, with exporters amongst the most notable gainers, as ongoing weakness in the yen boosted the outlook for export earnings.

The yen has been weighed by speculation the country’s main opposition leader, Liberal Democratic Party leader Shinzo Abe will win the upcoming general election on December 16.

Abe said earlier that the Bank of Japan should employ unlimited monetary easing until inflation reaches 2%.

Automakers Nissan and Honda jumped 2.5% and 2% respectively, while digital camera maker Canon added 1.15%.

Troubled electronics retailer Sharp saw shares rally 3% after the Wall Street Journal reported the company was in talks with U.S. computer maker Dell for an investment of as much as USD240 million.

Meanwhile, shares in Hong Kong benefited from the upbeat market mood.

The China banking sector were among the biggest gainers on the index, with China Construction Bank shares up 1.6%, Industrial and Commercial Bank of China rising 1% and Bank of China adding 1.4%.

Hong Kong’s blue-chip exporters also contributed to gains, with footwear firm Belle International Holdings up 2.15%and Li & Fung rising 1.6%.

Elsewhere, Australia’s ASX/200 index rose on the back of strong gains in lenders.

The nation’s big four banks all rose, with Australia's biggest lender, the Commonwealth Bank of Australia adding 0.8%, ANZ Banking Group climbing 1.15% and Westpac Banking Group trading up 0.8%.

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Looking ahead, European stock market futures pointed to a higher open, as risk appetite remained supported by hopes that the U.S. fiscal cliff could be averted.

The EURO STOXX 50 futures pointed to a gain of 0.6% at the open, France’s CAC 40 futures added 0.6%, London’s FTSE 100 futures eased up 0.35%, while Germany's DAX futures pointed to a 0.45% rise at the open.

Later in the day, Italy was to hold an auction of 10-year government bonds, while the U.S. was to release preliminary data on third quarter growth as well as the weekly government report on jobless claims.