Asian markets down on worry over US debt showdown

Asian markets down on worry over US debt showdown after hard GOP stance on debt ceiling vote

Associated Press

MUMBAI, India (AP) -- Asian markets were weaker Monday after heated political rhetoric from the U.S. raised worries that the partial shutdown of the American government could bring the world's largest economy close to defaulting on its debt.

Japan's Nikkei index, the regional heavyweight, slumped by 0.8 percent to 13,915.90. Hong Kong's Hang Seng index dipped 0.7 percent to 22,985.36. Losses weren't as steep on South Korea's Kospi, which fell less than 0.1 percent to 1,994.97.

Australia's S&P/ASX 200 fell 1 percent to 5,158.30, but trading volumes were light due to holidays in some parts of the country. Benchmarks in Indonesia, India and Taiwan also fell. China's markets were closed Monday for a public holiday.

Investor anxiety has risen as the U.S. budget impasse between Republicans and the White House drags on.

On Sunday, Republican House of Representatives Speaker John Boehner ruled out a vote on a straightforward bill to raise the government's borrowing authority without concessions from President Barack Obama before an Oct. 17 deadline, moving closer to the possibility of default.

"This has really rattled markets and is likely to result in further near-term weakness for global equities," Stan Shamu, a market strategist for IG investors, said in a note to clients.

SMG investment group also cited the U.S. political showdown as the reason for Monday's anemic markets, saying in an advisory that "the latest comments from politicians showed no signs of progress to resolve the budget standoff."

Wall Street stocks had posted modest gains Friday, driven by optimism at the time that Washington's bickering politicians would resolve their budget fight. The Dow Jones industrial average rose 0.5 percent, to close at 15,072.58. The Standard & Poor's 500 index added 0.7 percent, to 1,690.50. The Nasdaq composite rose 0.9 percent, to 3,807.75.

Benchmark oil for November delivery fell 51 cents to $103.33 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to close at $103.84 on the Nymex on Friday

In currencies, the euro rose to $1.3564 from $1.3559 late Friday. The dollar fell to 97.16 yen from 97.31 yen.

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