Asian stocks fell on Monday as traders grow nervous at the lack of movement in Washington on ending the US government shutdown while a deadline approaches for lawmakers to raise the country’s borrowing limit.
The dollar slipped further against the yen and euro as the budget stand-off on Capitol Hill approaches a seventh day with no end in sight.
Tokyo plunged 1.07 percent by the break, Sydney fell 0.16 percent, Hong Kong shed 0.84 percent and Seoul was down 0.11 percent.
Shanghai was closed for a public holiday.
US Treasury Secretary Jack Lew warned Sunday that Congress was “playing with fire” as Republican House leader John Boehner said the party would not raise the US debt ceiling without spending cuts.
Global markets are on tenterhooks, with concerns that if the borrowing limit is not raised by October 17 — when the country runs out of cash — Washington will not be able to pay its bills and in turn default.
While investors expect some sort of deal to be hammered out by the cut-off date, anxiety is building that no headway has been made so far in the crisis, which has forced President Barack Obama to pull out of the Asia-Pacific Economic Cooperation (APEC) summit in Indonesia.
A similar stand-off in 2011 went down to the wire before the debt ceiling was raised but not before world stock markets tumbled and Standard & Poor’s downgraded Washington’s AAA sovereign rating.
The uncertainty over the US economy put downward pressure on the dollar. In early trade the greenback bought 97.21 yen, compared with 97.47 yen in New York Friday. The euro fetched $1.3567 and 131.75 yen against with $1.3557 and 132.14 yen.
However, US investors on Wall Street remain upbeat that Democrats and Republicans will eventually reach an agreement.
In Friday the Dow ended 0.51 percent higher, the S&P 500 added 0.71 percent and the Nasdaq was up 0.89 percent.
On oil markets New York’s main contract, West Texas Intermediate for delivery in November was down 49 cents to $103.35 while Brent North Sea crude for November eased 41 cents to $109.05.
Gold cost $1,311.70 at 0236 GMT compared with $1,315.81 on Friday.
Source: AFP
