Worries about the U.S. economy and a looming budget battle in Washington kept Asian stock from maintaining a firm direction on Thursday.
Data released on Wednesday showed durable goods orders items expected to last at least three years increased by only 0.1 per cent in August after a sharp drop the month before, raising concerns that third quarter U.S. economic growth may not be as strong as anticipated.
Meanwhile, two financial deadlines for the U.S. government loom. Congress needs to pass a funding bill to keep the government operating after October 1, when the federal government’s new fiscal year starts. And the nation’s debt ceiling the government’s borrowing limit needs to be raised before October 17.
“The prospect of a US Federal government shutdown is likely to undermine equity prices further in the coming days,” said analysts at Capital Economics in an email commentary.
The White House and Republican lawmakers, who disagree on spending cuts and other key budget issues, have just days to reach a compromise. In 2011, a similar situation roiled markets at a time when Europe’s debt crisis was flaring, and prompted Standard & Poor’s to strip the U.S. of its triple A credit rating.
Japan’s Nikkei 225 index, which fell on opening, advanced 0.3 per cent later in the morning to 14,670.51. South Korea’s Kospi gained 0.1 per cent to 2,000.62. Hong Kong’s Hang Seng fell 0.5 per cent to 23,090.80. Australia’s S&P/ASX 200 index was nearly unchanged at 5,277.20.
Wall Street stocks fell for a fifth straight day. The Dow Jones industrial average fell 0.4 per cent to close at 15,273.26. The Standard & Poor’s 500 index fell 0.3 per cent to 1,692.77. The Nasdaq composite dropped 7.16 points, or 0.2 per cent, to 3,761.10.
Benchmark oil for November delivery fell 35 cents to $102.33 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 47 cents to close at $102.66 a barrel on the Nymex on Wednesday.
In currencies, the euro fell to $1.3513 from $1.3517 late Wednesday. The dollar rose to 98.93 yen from 98.48 yen.