Hong Kong stocks are expected to rise when the market opens today for the first time this year, following the fiscal cliff deal in the US Senate and new signs that manufacturing is picking up on the mainland. Eugene Law, an analyst at brokerage China Galaxy International, expects a "meaningful surge" in the city's blue chips as the deal, which removes some uncertainties in the United States economy, will add to the optimism over the global economy this year. Citing the so-called New Year effect, Law noted that the Hang Seng Index had risen on the first trading day of the last two years - 2.4 per cent in 2012 and 1.7 per cent the year before. In 2010, however, the index dropped by 0.2 per cent. Echoing the upbeat projection, Francis Kwok Sze-chi, an executive director at Bright Smart Securities & Commodities, said Hong Kong and other regional markets were likely to open higher as the US market saw a meaningful rebound before the holidays, snapping five consecutive sessions of declines. "The S&P index rose 13 per cent in 2012, the best annual performance since 2009," Kwok said. "Unlike previous years, US trading volume has been high." In a 89-8 vote, the US Senate passed a bill yesterday to neutralise a fiscal-cliff combination of across-the-board tax increases and spending cuts. The vote followed a compromise deal between the White House and Senate Republicans. It still must be put to a vote in the House of Representatives. Most investors had begun to bet on a deal anyway. According to a survey by Bank of America Merrill Lynch, the proportion of investors viewing the US fiscal cliff as the biggest risk had already fallen to 47 per cent in December, down from 54 per cent in November. Investors have also shown signs of more confidence in the US economic recovery after the country's third-quarter gross domestic product expanded more than expected at 3.1 per cent - the fastest pace since late 2011. Jefferies' top strategist Sean Darby said before the deal that he expected the fiscal cliff to be a bumpy ride but one that would have a happy ending. "The politicians will take us off the cliff, but eventually stumble through a series of crisis-driven events," he said, projecting that the US economy will suffer through the first half of 2013 but begin to regain momentum in the second half. Apart from the positive development in the US, Chinese official manufacturing data showing modest gains in December also bodes well for the market. The Purchasing Managers' Index was 50.6 in December, unchanged from November, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. A reading above 50 indicates expansion while that under 50 shows contraction.