Hong Kong and Japan led Asian markets lower on Monday, as regional stocks and investor sentiment were hurt by continued uncertainty over the U.S. government shutdown and the upcoming debt ceiling debate.
The U.S. government shutdown, which dominated attention last week, remained a focus for Asia . The lack of significant developments over the weekend allowed regional markets to follow Friday's bounce on Wall Street , which rose as investors became more positive that politicians will be able to resolve the budget impasse in the U.S.
The early gains were short-lived as uncertainty remained over how long the government will remain shut down. Furthermore, there was caution over the upcoming debate in the U.S. over the debt ceiling. On Sunday, House Speaker John Boehner wouldn't bring up bills to fully reopen the government or increase the borrowing limit unless Democrats agree to broader talks aimed at cutting the deficit.
"Markets remain unimpressed with the lack of progress in breaking the U.S. deadlock," said Kenichi Hirano , market adviser at Tachibana Securities .
Stocks in Hong Kong fell the most, with the Hang Seng Index down 0.9%. There was no trading in Shanghai , as mainland China enjoyed the last day of its week-long National Week public holiday.
Japan's Nikkei fell 0.9%, adding to a hefty 5% decline last week. Although the Nikkei started the day with a 0.4% rise, it quickly pared its gains as a stronger yen weighed on the market. The U.S. dollar last traded at Yen97.04 compared with Yen97.47 late Friday in New York .
Some markets managed to cling close to the breakeven mark, with South Korea's Kospi down 0.1% and Singapore's Strait Times Index flat. The Philippines' PSE Composite added 0.5%.
Australia's S&P /ASX 200 dropped 0.3%, in thin trading due to a public holiday in several Australian states.
Company-specific news influenced a number of stocks in Tokyo. Japan Airlines Co. rose 3% following reports that company is preparing to announce a landmark deal with Airbus , which would break the long-held lock of Boeing Co. (BA) in the Japanese market.
Sumitomo Mitsui Financial Group (SMFJY) added 0.1% in Tokyo , outperforming the broader market, after the company revised upwards its earnings outlook Friday for the six months ended Sept. 30 , with the company now expecting a net profit compared to earlier expectations of an on-year decline.
In Singapore , sterilization-services company Blumont Group and investment firm Asiasons Capital fell precipitously, losing more than 85% of the their value early on Monday after the Singapore Exchange lifted trading suspensions on both stocks and applied stricter trading rules to them.
Singapore Exchange barred short selling and margin trading of these counters, declaring them "designated securities" subject to stricter rules and added scrutiny.
AI
