By RTT News, September 30, 2013, 05:17:00 AM EDT
(RTTNews.com) - Asian stocks fell sharply on Monday on growing concerns a prolonged U.S. budget impasse will hurt economic growth in the world's largest economy. Besides the budget stalemate, investors are more worried about debt default as the government won't be able to pay some of its bills on October 17 if Congress doesn't raise the debt ceiling. A failure to raise the federal debt limit would have huge ramifications for the global economy. Rising political tensions in Italy and disappointing economic reports out of China and Japan also kept investor sentiment subdued.
Japan's Nikkei index fell over 2 percent to end at its lowest level in about two weeks, weighed down by the yen's appreciation on concerns over the U.S. budget crisis and weak industrial production data domestically. The broader Topix index fell 1.9 percent. Exporters and technology firms bore the brunt of the selling as the dollar traded below 98 yen for the first time since the end of August.
Advantest fell 2.4 percent, Toyota Motor lost 2.6 percent and Nintendo declined 2.5 percent. Toshiba dropped 1.1 percent after announcing job cuts at its loss-making TV unit. Mizuho Financial Group, Inc. slumped 4 percent after the Financial Services Agency penalized its banking unit for "serious problems" with its compliance systems.
Japan's industrial output contracted a seasonally adjusted 0.7 percent in August compared to the previous month, official data showed, missing forecasts for a 0.3 percent decline. Production eased 0.2 percent on an annual basis - also shy of expectations for a 0.4 percent gain. The total value of retail sales climbed 1.1 percent year-over-year in August, beating forecasts, and construction orders received by big 50 contractors increased
21.4 percent annually, while housing starts growth slowed unexpectedly to 8.8 percent from 12.4 percent in July, separate reports showed.
China's Shanghai Composite bucked the downward trend to close 0.7 percent higher at 2,175, although trading remained thin ahead of the weeklong holiday starting Tuesday. In economic releases, China's manufacturing activity edged up at a pace slower than expected in September, a private survey showed. The HSBC China manufacturing purchasing managers' index rose to 50.2 from 50.1 in the previous month. That was significantly below the flash estimate of 51.2. Hong Kong's Hang Seng dropped 1.5 percent.
Australian shares lost ground as investors braced for a partial government shutdown in the U.S. The benchmark S&P/ASX 200 fell 88 points or 1.7 percent to 5,218, with resource and financial stocks leading the decliners. Banks fell across the board, with Westpac, NAB, ANZ and Commonwealth losing 2-3 percent. Global miner BHP Billiton lost 1.7 percent, Rio Tinto declined 2.5 percent and Fortescue Metals Group tumbled 3.9 percent. Gold miner Newcrest rose 2 percent as gold prices advanced on uncertainty over the U.S. budget impasse. Oil & gas producer Woodside Petroleum shed 1.3 percent and Santos retreated 3.7 percent.
Renaissance Uranium soared 33 percent after intersecting extensive sulphide mineralized zone in four holes drilled at the 1050 East prospect. Funtastic climbed 6.9 percent as the toy and confectionery firm posted an increase in full-year profit despite a relatively weak retail environment. Oz Minerals gained half a percent after clarifying that it has not received a takeover bid from Swiss mining company Glencore Xstrata.
In economic news, a measure of Australian consumer inflation rose 2.1 percent in September from a year earlier, holding steady from the gauge's August reading, data from TD Securities and the Melbourne Institute revealed. On a monthly basis, inflation rose 0.2 percent, accelerating slightly from 0.1 percent in the previous month. Another report from the Reserve Bank of Australia showed that total private sector credit in Australia rose 0.3 percent in August compared to the previous month, missing forecasts for an increase of 0.4 percent.
South Korea's Kospi average closed 0.7 percent lower at a two-week low after three affiliates of embattled Tong Yang Group filed for court receivership to avoid a default. Overseas investors, however, extended their buying streak for a 24th streak, purchasing shares worth a net 115 billion won, official data showed. Shares of Hyundai Motors, the nation's largest automaker, dropped 2.1 percent.
Industrial production in South Korea climbed a seasonally adjusted 1.8 percent in August compared to the previous three months, Statistics Korea said. That beat expectations for an increase of 1.1 percent. Industrial production spiked 3.3 percent on an annual basis, also topping forecasts.
New Zealand shares lost ground in line weak regional cues. The benchmark NZX-50 dropped a percent to 4,736, with 37 of its components retreating. Retailer Warehouse Group tumbled 2.9 percent, heavyweight Telecom fell 1.9 percent, Fletcher Building, the nation's largest construction company, dropped 1.5 percent, MightyRiverPower lost 1.2 percent below its issue price and Contact Energy closed 1.1 percent lower.
On the macroeconomic front, an index measuring business confidence came in with a score of 54.1 for September, with the construction, services and building sectors seeing significant gains, the ANZ business outlook revealed -touching a five-year high. Another report from Statistics New Zealand revealed that the total number of building permits issued in New Zealand rose a seasonally adjusted 0.8 percent in August from the previous month.
Elsewhere, Malaysia's KLSE Composite was down 0.4 percent and the Taiwan Weighted average dropped 0.7 percent, while the key benchmark indexes in India, Indonesia and Singapore were down 1-2 percent.
U.S. stocks fell modestly on Friday on continued concerns about the U.S. budget talks and the debt ceiling. On the economic front, U.S. personal income and spending both rose in line with estimates in August, while confidence among consumers declined to a five-month low in September, separate reports showed. The Dow fell half a percent, the tech-heavy Nasdaq slid 0.2 percent and the S&P 500 declined 0.4 percent.
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