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AAP

2013-01-03

A roundup of trading on major world markets.

NEW YORK - US stocks shot up Wednesday on news of a fiscal-cliff deal in Congress that prevented most tax increases and delayed sharp spending cuts.

The Dow Jones Industrial Average was up 243.21 points (two per cent) at 13,347.35.

The tech-rich Nasdaq Composite added 80.19 points (2.6 per cent) at 3,099.70, while the broad-market S&P 500 gained 28.72 (two per cent) at 1,454.91.

In the first trading day of the new year, Wall Street joined a global equities rally celebrating the passage of a bill that avoids the fiscal cliff of automatic spending cuts and tax increases.

While markets were closed Tuesday for the New Year holiday, lawmakers approved a compromise bill that raises taxes on the rich and puts off automatic $US109 billion ($A105.39 billion) federal budget cuts for two months.

If they had failed, Americans would have been hit by sweeping tax hikes, and spending cuts would have kicked in across the government, in a combined $500 billion shock that could have undermined the tepid recovery.

LONDON - Europe's main stock markets posted strong gains at the close of trading on Wednesday after the breakthrough in the US.

In London, the FTSE 100 index of leading companies added 2.20 per cent to breach the 6,000 point level at 6,027.37 points.

Frankfurt's DAX 30 leapt by 2.19 per cent to 7,778.78 points, and in Paris the CAC 40 gained 2.55 per cent to 3,733.93 points.

Milan's FTSE Mib index was 3.81 per cent higher, while the Ibex-35 added 3.43 per cent in Madrid.

TOKYO - Asian markets rose sharply on Wednesday after the US Congress backed a deal to avert a "fiscal cliff" of drastic tax rises and spending cuts in an upbeat start to the year for regional markets.

As the House of Representatives approved the bill, which avoids tax hikes for most Americans and delays automatic spending cuts, investors piled into the embattled euro as the appetite for risk increased and oil prices surged.

Hong Kong was the biggest riser in Asia, adding 2.89 per cent, or 655.06 points, to 23,311.98, receiving an additional boost from positive Chinese manufacturing data.

Seoul put on 1.71 per cent, or 34.05 points, advancing to 2,031.10.

Financial markets in Japan and mainland China were closed for a public holiday.

WELLINGTON - The New Zealand share market was closed for a public holiday.