Asian stocks rose Thursday, a day after the U.S. reached a deal to stave off the so-called fiscal cliff, but enthusiasm waned by the time European markets opened.
A last-minute deal agreed to by U.S. lawmakers late Tuesday prevented steep tax increases and spending cuts from automatically taking effect. Economists were warning that the cuts could eventually trigger a recession in the world's largest economy.
Wall Street stocks soared Wednesday amid investor relief that Republicans and Democrats had hammered out a last-minute deal. However, the compromise left many issues unresolved.
The deal doesn't include any significant deficit-cutting agreement, meaning the country still doesn't have a long-term plan on how to curb spending. Big cuts to defense and domestic programs weren't worked out but instead were delayed for two months.
“Continued advances will depend on how spending deals are or are not negotiated over the next two months and whether any down payment on the national debt is made,'' said analysts at DBS Bank Ltd. in Singapore.
In early European trading, Britain's FTSE 100 fell marginally to 6,025.70. Germany's DAX shed 0.1 percent to 7,771.19 and France's CAC-40 lost 0.4 percent to 3,717.52. Wall Street also appeared headed for a lower open. Dow Jones futures fell 0.1 percent to 13,313 and S&P 500 futures lost 0.2 percent to 1,454.20.
However, benchmarks in Hong Kong and Sydney crested above the 19-month highs hit Wednesday. Hong Kong's Hang Seng Index rose 0.1 percent to 23,398.98, while Australia's S&P/ASX 200 rose 0.7 percent to 4,740.70. Benchmarks in Singapore, Taiwan, Indonesia, Thailand, the Philippines and New Zealand also rose.
South Korea's Kospi fell 0.6 percent to 2,019.41 amid fears the weakening Japanese yen could hurt South Korean exporters. Hyundai Motor Co., the country's largest carmaker, tumbled 4.6 percent. Auto parts maker Mando Corp. slid 5.5 percent.
Markets in Japan and mainland China were closed for extended holidays until Friday.
Benchmark oil for February delivery fell 35 cents to $92.77 in electronic trading on the New York Mercantile Exchange. The contract rose $1.30 to finish at $93.12 per barrel on the