Stocks hold steady despite US govt shutdown
World stocks mostly rise despite US Congress failure to reach deal to avoid govt shutdown
People walk past the electronic stock indicator of a securities firm in Tokyo, Monday, Sept. 30, 2013. Japan's Nikkei 225 stock average, the region's heavyweight, closed 2.1 percent lower at 14,455.80 as financial markets were rocked Monday by fears that the U.S. government was heading for a shutdown and renewed political instability in Italy. (AP Photo/Shizuo Kambayashi)
·Associated PressLONDON (AP) -- World stock markets held their nerve Tuesday despite the fact that the U.S. government was forced to partially shut down after Congress failed to approve a funding agreement.
The shutdown affects hundreds of thousands of federal workers and scores of agencies and operations. But some critical parts of the government, from the military to air traffic controllers, will remain open, and analysts said significant damage to the economy was unlikely unless the shutdown lasted more than a few days.
"Markets have become more and more rational over the last 24 months, particularly when they've seen central banks ... all working very closely together to make sure their economies are supported," said Evan Lucas, market analyst at IG in Melbourne, Australia.
After falling the day before the U.S. shutdown deadline, European stocks mostly recovered.
Germany's DAX advanced 0.5 percent to 8,639.61 while France's CAC-40 rose 0.7 percent to 4,170.83. They were supported by figures showing unemployment across the eurozone stabilized in August, a further sign of economic recovery. Britain's FTSE 100 fell 0.4 percent to 6,439.86.
Wall Street was also expected to open slightly higher, with Dow and S&P 500 futures up 0.2 percent.
The dollar, however, took a hit — it fell 0.5 percent against the Japanese yen, to 97.78 yen, while the euro rose 0.1 percent to $1.3544.
Earlier, in Asia, Japan's Nikkei 225 advanced 0.2 percent to close at 14,484.72 after the latest quarterly "tankan" survey showed a sharp improvement from the prior period. Large manufacturers were especially upbeat, with a reading of positive 12, up from 4 in the July survey.
South Korea's Kospi swung between gains and losses until finally settling 0.1 percent higher at 1,998.87. Australia's S&P/ASX 200 fell 0.2 percent to 5,206.80. Benchmarks in Singapore, Taiwan, Indonesia and New Zealand also rose. Malaysia fell.
Markets in mainland China and Hong Kong were closed for public holidays and couldn't react to a survey showing that manufacturing in the world's No. 2 economy barely expanded in September.
Tuesday's report by the China Federation of Logistics and Purchasing showed manufacturing expanded for the third month in a row. But the group's purchasing managers' index rose by only a fraction to 51.1 last month from 51.0 in August, less than economists expected.
The federation's report comes a day after a private survey by HSBC also indicated weaker than expected growth in China's massive manufacturing sector.
Benchmark oil for November delivery was up 3 cents to $102.36 per barrel in electronic trading on the New York Mercantile Exchange. The contract grade fell 54 cents to close at $102.33 a barrel on Monday.
