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Asian markets mostly up despite US debt showdown

October 8, 2013

MUMBAI, India (AP) — Most Asian markets recovered some losses on Tuesday despite investors warily watching the uncertain political standoff in the U.S. over raising the country’s debt ceiling.

Japan’s Nikkei index inched up by 0.3 percent to 13,891.69, while Hong Kong’s Hang Seng index was up 0.8 percent to 23,165.68. China’s Shanghai composite was up 0.5 percent to 2,186.30.

South Korea bucked the positive trend, with the Kospi down 0.2 percent to 1,990.36.

Traders recently have become nervous about the standoff in Washington, particularly over the debt ceiling. The U.S. has to raise its debt ceiling by Oct. 17. If it doesn’t, the world’s largest economy faces the possibility of defaulting on its debts, a move that would send shockwaves around global markets.

Though most analysts think a deal to avoid default will be agreed on in time, investors are fidgety — uncertainty discourages investors from buying into risky assets, such as stocks. 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 the deadline.

The uncertainty weighed on global markets Monday. In the U.S., the Dow Jones industrial average was down 0.5 percent at 14,993 while the broader S&P 500 index fell 0.4 percent to 1,683.

The focus of attention in financial markets will likely remain on developments in the U.S. capital.

“Events in Washington are likely to continue to dominate global markets in the week ahead,” said Alan Ruskin, an analyst at Deutsche Bank.

In currencies, the euro slipped to $1.3563 from $1.3575 in late trading Monday. The dollar rose to 96.90 Japanese yen from 96.67.

Oil prices fell, with crude for November delivery dropping 81 cents to close at $103.03 a barrel on the New York Mercantile Exchange.


Associated Press writer Pan Pylas in London contributed to this report.

Update hourly