The ASX 200 index climbed a whopping 1.6% to close at 5230.9 today, marking its biggest intraday gain in more than 3 months.
Today’s rally meant that the market closed the week up 0.5%, after a weak few days.
Investors have been cautious since the US Government shutdown last week, but turned optimistic today after the Republican Party proposed a temporary, 6-week increase to the debt ceiling while negotiations continued.
Via investing.com, here’s what happened:
CommSec analyst Steven Daghlian reports that shares in South Korea, China, Hong Kong and Japan have also risen on today’s news.
“Although there still remains much work to be done (as President Obama is pushing back on the proposition), it seems to be a step in the right direction; helping investors believe that a resolution isn’t too far off,” CommSec reported this afternoon.
The AFR reports that shares were also buoyed by news that Janet Yellen would likely succeed Ben Bernanke as chair of the US Fed. Yellen has been described as “low-key”, dovish policymaker, and is thought to be likely to continue the policies of her predecessor.