Asian markets down as US budget woes drag on
- Article by: PAMELA SAMPSON
- Associated Press
- October 3, 2013 - 10:55 PM
BANGKOK — Uncertainty about how long the partial shutdown of the U.S. government will last kept Asian stock markets on edge Friday.
Some 800,000 federal workers and scores of agencies were idled earlier this week after a sharply divided U.S. Congress failed to agree on short-term funding for the government to pay its bills beyond Monday, when the fiscal year ended.
Markets initially took the passing of the deadline and the partial shutdown of nonessential government services in stride. But investor anxiety has risen as the budget impasse between Republicans in the House of Representatives and the White House drags on.
Republicans are insisting that President Barack Obama accept changes to the health care law he pushed through three years ago as part of a budget bill. Obama refuses to consider any deal linking the health care law to routine legislation needed to extend government funding.
Although House speaker John Boehner "affirmed that he is committed to avoid this situation, we don't see much breakthrough coming," said Cynthia Kalasopatan at Mizuho Bank Ltd. in Singapore.
Investors also had to digest some disappointing economic news from the world's biggest economy.
The Institute of Supply Management said that sales fell sharply, new orders dipped and hiring weakened at U.S. service companies. The report covers industries including retail, construction, health care and financial services.
Japan's Nikkei 225 index fell 0.4 percent to 14,095.58. Hong Kong's Hang Seng lost 0.5 percent to 23,096.16. South Korea's Kospi fell 0.2 percent to 1,996.10. Australia's S&P/ASX 200 shed 0.4 percent to 5,214.30.
American lawmakers also have to agree on an increase in the debt ceiling by Oct. 17 or the world's largest economy may default on its debt payments. Congress must periodically raise the limit on government borrowing, but the once-routine matter has become the subject of bitter fights between Republicans and Democrats.
As well as undermining confidence in the ability of the U.S. to pay back what it owes, a U.S. default could send shockwaves round the world economy, threatening the patchy recovery.
On Thursday, the Dow Jones industrial average fell 0.9 percent to close at 14,996.48. The Standard & Poor's 500 dropped 0.9 percent to 1,678.66. The Nasdaq composite declined 1.1 percent to 3,774.34.
Benchmark oil for November delivery was down 16 cents to $103.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 79 cents to close at $103.31 a barrel on the Nymex on Thursday.
In currencies, the euro rose to $1.3628 from $1.3626 late Thursday. The dollar rose to 97.25 yen from 97.12 yen.
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