The Australian share market is up by two per cent after United States congressional leaders reached an agreement on raising the US debt limit.
US President Barack Obama said the deal will cut about $US1 trillion in spending over 10 years, and avoid default which would have had a devastating effect on the US economy and global markets.
Local shares were already higher before news of the deal broke, and the market doubled its gains on the announcement.
At 1126 AEST on Monday, the benchmark S&P/ASX200 index was up 88.4 points, or two per cent, at 4,513, while the broader All Ordinaries index was up 85.2 points, or 1.89 per cent, at 4,585.2.
On the ASX 24, the September share price index futures contract was 105 points higher at 4,482 points, with 26,028 contracts traded.
CMC Markets analyst Michael McCarthy said investors were relieved the US will avoid a default on its debts.
“Clearly the big issue for global markets at the moment is the US negotiations, and at the moment there is a lot of relief that a deal has been done,” he said.
“It’s a good first step.”
