World markets advanced Wednesday as lawmakers in the United States completed legislation that will mute much but not all of the fiscal cliff.

Asian and European stocks post strong gains, while government bonds in weaker eurozone economies rally as investor appetite for riskier assets rise on the diminished threat of an immediate hit to growth in the world's largest economy.

The Senate passed a compromise measure late Tuesday that would extend Bush-era tax cuts for the vast majority of Americans and spare tens of millions from the Alternative Minimum Tax.

But the fiscal cliff deal, crafted over the holiday by Vice President Joe Biden and Senate Minority Leader Mitch McConnell, left a range of big issues unresolved and some analysts say the positive market reaction could dissipate quickly.

"Today's bullish tone may continue as we head toward the weekend but the euphoria will most certainly evaporate as the deal voted through does not include raising the debt ceiling and longer term budget cuts," said Joe Rundle, head of trading at ETX Capital in London.

All major global markets were closed Tuesday for the New Year's holiday, so indices in Asia and Australia provided the first clues about investor sentiment.

Australia's ASX All Ordinaries index added 1.3%. South Korea's KOSPI gained 1.7% and the Hang Seng in Hong Kong advanced 2.2%. Tokyo's Nikkei and the Shanghai Composite remain closed for holiday celebrations, but will reopen later in the week.

On Wednesday morning, the FTSE-100 broke through 6,000 points for the first time since July 2011, adding 1.8%. Other major European indices posted similar gains. Meanwhile, yields on Spanish and Italian government bonds fell sharply.

Investors in the U.S. will get their first shot at reaction when markets open in New York. U.S. stock futures were pointing to a higher open.

While the agreement provides some short-term certainty, it leaves a range of big issues unaddressed.