Financial Markets React Positively To U.S. Debt Deal

Congress has approved an 11th-hour measure to end a partial government shutdown and pull the country back from the brink of a historic debt default. Now that a financial calamity has been avoided, how did overseas markets react?

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And news that Washington has finally reached a deal, averting a potentially catastrophic debt default, is drawing a mixed reaction from the rest of the world.

NPR's Philip Reeves, in London, is watching the markets for us.

PHILIP REEVES, BYLINE: We all know that, at times, the markets can be panicky and irrational. Yet, during this crisis, they held their nerve. Analysts say traders were always pretty confident there would be a last-minute deal. This time, they were right.

Today, traders are reacting more with guarded relief than euphoria to the news that the crisis is over - at least for now. Markets in Asia and the Pacific edged upwards, though in Hong Kong, stocks actually dipped, partly thanks to anxiety about Chinese economic stats, due out tomorrow.

In Europe, Britain's FTSE, Germany's DAX, and France's CAC all started the day slightly down.

Market analysts say there's concern that the stand-off and partial government shut-down may have damaged the U.S.'s frail economic recovery. Investors are also clearly well aware yesterday's deal's only a temporary fix, and that there may be another perilous budget battle in the New Year.

Philip Reeves, NPR News, London.

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