Asian shares mixed as US debt row goes to wire

People walk by an electronic stock board of a securities firm in Tokyo on Oct. 4, 2013. Asian markets were mixed Wednesday, Oct. 16, 2013, as investors focus on the United States, where lawmakers remain at loggerheads barely a day ahead of a critical deadline to raise the debt ceiling and avoid default. AP PHOTO/KOJI SASAHARA

HONG KONG—Asian markets were mixed Wednesday as investors focus on the United States, where lawmakers remain at loggerheads barely a day ahead of a critical deadline to raise the debt ceiling and avoid default.

Earlier optimism that Congress would eventually reach an agreement to fund the government is slowly giving way to despair, while Fitch ratings agency added to jitters by putting Washington’s AAA rating on a downgrade warning.

Tokyo rose 0.18 percent, or 25.60 points, to 14,467.14 but Seoul lost 0.31 percent, or 6.35 points, to 2,034.61, while Sydney ended flat, edging up 3.8 points to 5,262.9. Hong Kong fell 0.46 percent, or 108.19 points, to 23,228.33.

Shanghai closed down 1.81 percent, or 40.34 points, at 2,193.07 on speculation mainland authorities will restart initial public offerings soon, raising fears of a share glut.

Mumbai was closed for a public holiday.

Efforts to end the US debt showdown before Thursday’s deadline collapsed Tuesday after an extreme Republican rump in the House of Representative refused to back a deal put forward by Speaker John Boehner. Another plan did not even get off the ground.

The proposals would have reopened the government after an Oct. 1 shutdown as well as increase the country’s borrowing limit until Feb. 7.

The House and Senate have little room to fashion an agreement before Thursday, raising alarm bells that the US will default.

Economists have warned that such a scenario will have devastating effects globally and would lead to a worldwide recession worse than that caused by the 2008 financial crisis.

Aides said the House failure means Senate Majority Leader Harry Reid and top Republican Senator Mitch McConnell must now try to find agreement. They had put earlier negotiations on hold after Boehner surprised many by trying to cobble together a House plan.

Despite the shenanigans on Capitol Hill SMBC Nikko Securities general manager of equities Hiroichi Nishi told Dow Jones Newswires: “Despite the shortened time horizon and Fitch’s action, hope springs eternal that a ‘disaster scenario’ (default) will be avoided at the last minute.”

But Fitch warned it would downgrade the US debt rating from its highest level, citing the possibility the Treasury could default on its obligations.

“The US authorities have not raised the federal debt ceiling in a timely manner,” it said.

“Although Fitch continues to believe that the debt ceiling will be raised soon, the political brinkmanship and reduced financing flexibility could increase the risk of a US default.”

Such a move by Fitch would bring its rating in line with Standard & Poor’s, which downgraded the US in 2011 following a similar stand-off.

Wall Street ended in negative territory as the default nears. The Dow slipped 0.87 percent, the S&P 500 fell 0.71 percent and the Nasdaq lost 0.56 percent.

However, in afternoon Asian trade the dollar remained resilient, buying 98.38 yen, up from 98.16 yen in New York.

The euro was changing hands at $1.3519 and 133.04 yen, compared with $1.3525 and 132.77 yen.

On oil markets New York’s main contract, West Texas Intermediate (WTI) for delivery in November, was up 10 cents at $101.31 a barrel in afternoon trade, while Brent North Sea crude for November fell 57 cents to $109.39 a barrel.

Gold cost $1,282.80 at 1059 GMT compared with $1,257.56 on Tuesday.

In other markets:

— Taiwan shed 0.43 percent, or 35.7 points, to 8,332.18.

Smartphone maker HTC fell 1.57 percent to Tw$125.5 while Taiwan Semiconductor Manufacturing Co. was down 0.93 percent at Tw$106.0.

— Wellington rose 0.23 percent, or 10.85 points, to 4,758.77.

Fletcher Building was up 1.38 percent at NZ$9.53 but Telecom fell 0.87 percent at NZ$2.28.

— Manila added 0.63 percent, or 40.87 points, to 6,483.57.

Metropolitan Bank and Trust rose 2.88 percent to 89.45 pesos, while Philippine Long Distance Telephone eased 0.35 percent to 2,860 pesos.

— Jakarta ended down 0.61 percent, or 27.65 points, at 4,492.26.

Food manufacturer Wilmar Cahaya Kalbar rose 5.56 percent to 1,330 rupiah, while retailer Ramayana Lestari Sentosa fell 5.30 percent to 1,250 rupiah.

— Kuala Lumpur gained 0.37 percent, or 6.61 points, to 1,791.37.

RHB Capital rose 3.3 percent to 7.82 ringgit while Top Glove shed 3.4 percent to 5.75 ringgit.

— Singapore rose 0.28 percent, or 8.78 points, to 3,174.03.

Property developer City Developments climbed 1.06 percent to finish at Sg$10.47 and Singapore Telecom ended 1.08 percent lower at Sg$3.67.

— Bangkok slipped 0.58 percent, or 8.52 points, to 1,464.38.

Coal producer Banpu rose 2.52 percent to 30.50 baht, while Bangkok Bank fell 0.97 percent to 205 baht.