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Asian stocks higher after Syria breakthrough

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(Globalpost/GlobalPost)

Asian markets rallied on Monday as fears over a military strike on Syria receded after the United States and Russia agreed a deal that will see the Assad regime give up its chemical weapons.

Trade remained cautious, however, ahead of a two-day meeting at the US Federal Reserve where policymakers are expected to begin winding down the bank's stimulus programme.

The dollar was also lower after Larry Summers, the man tipped to be named Ben Bernanke's successor as Fed chairman, withdrew from the race.

Hong Kong climbed 1.47 percent, Sydney added 0.77 percent and Seoul rose 0.90 percent, while Shanghai added 0.36 percent.

Tokyo and Kuala Lumpur were closed for public holidays.

Traders were given a strong cue from Wall Street, where the Dow rose 0.49 percent, the S&P 500 put on 0.27 percent and the Nasdaq advanced 0.17 percent.

Damascus said at the weekend it would commit to a plan to eradicate its chemical weapons after a deal brokered by Russia and the United States at the weekend that will avert a threatened attack by American forces.

US Secretary of State John Kerry and his Russian counterpart Sergei Lavrov announced the deal Saturday that will see Syria's toxic arsenal dismantled and destroyed by mid-2014.

Global markets were sent into a tailspin last month on expectations of a US-led strike that fuelled fears of a wider conflict in the Middle East.

Attention this week is on Washington and the Fed's plans for its $85 billion a month bond-buying scheme. With most economists betting the bank will announce a reduction of its purchases, the key issue is how quickly and by how much it will "taper".

Markets were taken a little by surprise after Summers decided to withdraw from the race to become the next Fed boss citing fears of an "acrimonious" confirmation process.

Analysts said the move means the two other top contenders for the post -- vice chair Janet Yellen and former vice chair Donald Kohn -- were architects of the Fed's bond-buying and supporters of the approach laid out by Bernanke. Summers was considered more hawkish towards the so-called quantitative easing scheme.

In early forex trade the dollar bought 98.83 yen, compared with 99.39 yen.

The euro was at $1.3369, compared with $1.3292 late Friday, while it also sat at 132.13 yen, compared with 132.11 yen.

On oil markets New York's main contract, West Texas Intermediate for delivery in October eased 77 cents to $107.44, while Brent North Sea crude for November declined 86 cents to $110.84.

Gold was $1,329.47 an ounce at 0220 GMT compared with $1,314.40 late Friday.

dan/jms

http://www.globalpost.com/dispatch/news/afp/130916/asian-stocks-higher-after-syria-breakthrough