Growth of Asia-Pacific Stock Market Followed by U.S. Debt Crisis

As a financial writer & advisor I am writing articles on debt management, debt consolidation. debt advice etc. And also I am a regular writer for various finance related Communities including www.ovlg.com and CDFA.(Blog Guest: Myrina Stein)

The recent America’s debt default has touched the ceiling, and has left many investors to rethink about their personal investment. For past 35 years, during the presidency of Ronald Reagan, U.S. national debt has always been a serious issue. During the presidency of George W. Bush, the national debt of the United States has increased for more than 70 percent. According to the recent survey, the total number of debt stands at over $14 trillion. With the increasing debt ceiling, the market is worried about the U.S. debt default crisis will eventually waive off the 82 days before the deadline. However, this positive impact of the elimination of 81 days has been encouraged by global market sentiment. Industry experts believe that as a consequence, the uncertainty of the global capital market has been ended.

81 days, has fallen in Tokyo stock market for three consecutive days last week. 225 stock average index has opened the rebound, and rose to 10,000 points or even more. On the other hand, the Nikkei ending closing rose 131.98 points to close at 9965.01 points, or 1.3%. Seoul stock market index climbed to 1.8%, to close at 2172.31points.Sydney, Australia stock market have also gained a hit of 2percent, closing up 1.7 percent, to close at 4497.8 points.

Aside from Japan Australia and South Korea, other Asia Pacific market has gained a hit of rise. China and Hong Kong’s Hang Seng index closed rose 223 points to 22,663 points, an increase of 1%. Chinese Taipei’s weighted index rose 57.2 points to close at 8701.38 points, an increase of 0.66%.

Though U.S. debt default has uplifted the stock market of the Asia Pacific countries but yet there is a bit of uncertainty about the outlook. The industry believes that although the U.S. debt farce has ended with the allocation of funds but there is still more to be reallocated. It may flock back to U.S once more or may flock to some other countries also.

State Securities Zhang Youngfeng, vice president of wealth management has pointed out in the “International Finance News” that debt default crisis has lifted up, after the configuration of dollar as hedge funds, and gold may therefore fell. He has also said that the farce of the U.S. debt has been sounding high but people realized that it is not absolutely safe though there is no credit rating cut. But the U.S. debt has weakened the confidence of the market investors. 

However, Zhang Youngfeng believes that U.S. debt will be waived off very soon, and there will be some return to attract back into the United States. In the recent market correction, a reallocation of funds may take place in the U.S. itself, which will lead to a reduction of credit, and will bring in some sensitive investment.