Asian markets mixed on US, France debt woes

HONG KONG—Asian markets were mixed Tuesday after a US committee charged with finding a deal to cut the nation’s huge deficit said it had failed, while worries over France’s credit rating also depressed sentiment.

Investors extended the broad sell-off to a fifth straight session as leaders on both sides of the Atlantic struggle to agree on a way out of their respective debt crises, which have sent global markets tumbling.

Tokyo eased 0.40 percent, or 33.53 points, to close at 8,314.74 and Sydney fell 0.72 percent, or 30.0 points, to 4,133.0 while Shanghai slipped 0.10 percent, or 2.50 points, to 2,412.63.

However, bargain-buying late in the day sent Hong Kong 0.14 percent, or 25.74 points, higher to 18,251.59 after four sessions of losses.

Seoul ended 0.34 percent, or 6.25 points, off at 1,826.28.

In Washington on Monday the 12-member bipartisan “supercommittee” said it was unable to meet its mission of cutting the US deficit by $1.2 trillion over 10 years.

Many had expected the panel – set up in August as part of a last-minute deal to raise the debt ceiling and avoid a devastating default – to fail due to political feuds over tax hikes on the rich and cuts to social spending.

“Investors are seeing this situation as further evidence that ‘the lights are on but no one’s at home’ when it comes to political leadership of the world’s major economies,” said Ric Spooner, chief market analyst at CMC Markets in Sydney.

“The changed circumstances of recent years require constructive action to foster economic growth and reduce debt over time.

“However, governments are finding it difficult to overcome divergent philosophies and sectional interests to achieve practical solutions,” he told Dow Jones Newswires.

While investors continue to fret about dangerously high bond yields in Spain and Italy, Moody’s added to the sense of fear by issuing a warning about France’s AAA credit rating.

An increase in Paris’s borrowing costs, slowing growth and the eurozone debt crisis was posing a threat to the country’s top-notch status, the agency said.

France pays almost twice as much to borrow on the bond markets as Germany, it pointed out, despite the government slashing spending and tightening up on tax revenues in an effort to stabilise its strained public finances.

However, Moody’s said France’s rating was safe for the moment.

The euro was at $1.3546 against the dollar, from $1.3490 late Monday in New York, and at 104.28 against the yen, from 103.75.

The dollar was at 76.95 yen, from 76.90 yen.

On oil markets New York’s main contract, light sweet crude for January delivery, fell 13 cents to $96.79 per barrel.

Brent North Sea crude for delivery in January advanced 15 cents to $107.03.

Gold was trading at $1,691.60 an ounce by 0945 GMT, from $1,702.10 late Monday.

In other markets:

— Singapore closed up 0.71 percent, or 19.22 points, at 2,717.20.

Jardine Cycle and Carriage gained 1.16 percent to Sg$44.41 and Singapore Airlines was up 0.86 percent at Sg$10.55.

— Taipei fell 0.61 percent, or 42.61 points, to 7,000.03.

Leading smartphone maker HTC lost 5.81 percent to Tw$600.0 while Taiwan Semiconductor Manufacturing Co. gained 0.95 percent lower to Tw$74.0.

— Manila ended 0.23 percent, or 9.72 points, lower at 4,289.75.

Lepanto Mining surged 6.4 percent to 1.49 pesos, San Miguel was 0.5 percent higher at 127.40 pesos and International Container Terminal was off 2.1 percent at 58.20 pesos.

— Wellington fell 0.13 percent, or 4.29 points, to 3,252.27.

Telecom rose 1.6 percent to NZ$2.525 but Fletcher building fell 1.2 percent to NZ$5.93 and Air New Zealand slipped 1.0 percent to NZ$1.025.

— Jakarta was 1.51 percent, or 55.70 points, up at 3,735.53.

Car maker Astra was up 2.5 percent at 69,350 rupiah, Bank Mandiri added 3.8 percent to 6,800 rupiah and Bank Rakyat gained 3.1 percent to 6,700 rupiah.

— Kuala Lumpur ended 0.27 percent, or 3.91 points, higher at 1,437.99.

Sime Darby shed 0.5 percent to 8.76 ringgit and Petronas Chemicals Group fell 0.7 percent to 5.94 ringgit while IOI Corp added 0.2 percent to 4.98 ringgit.

— Bangkok rose 1.27 percent, or 12.29 points, to end at 977.36.

— Mumbai closed up 119.32, or 0.75 percent, at 16,065.42.

Export-orientated firms, particular in the IT sector, were among the gainers, as the rupee fell to a record low against the US dollar over continued fears about the global economy.