Asian stocks were mixed, with Japan's Nikkei recovering from early as many stocks traded ex-dividend, including Nomura Holdings ( NMR ). However, sentiment remained cautious overall as the U.S. wrangles over its budget.
Congress needs to pass a short-term spending bill before October 1 to keep the government funded or risk a shutdown. Congress must also raise the federal borrowing limit to avoid a debt default by October 17.
The Nikkei's turnaround was attributed to Kyodo News saying the government is urgently considering a reduction in corporate tax rates. If corporate taxes are lowered, that could offset any negative impact from the scheduled consumption tax hike on October 1.
In addition, optimism emerged that Japan's Government Pension Investment Fund may boost shares in its portfolio. An advisory panel for GPIF will issue a report and meet the press on Thursday.
Shanghai slipped after China's Beige Book, showed business conditions are worse than recent positive economic data suggests, CNBC.com reports.
Separately, Beijing may be easing rules on foreign investment in certain industries. No details were given but the comments from the Chinese cabinet came after the state council's weekly meeting.
Australia's job vacancies rose last quarter for the first time in a year, surprising analysts who had expected a decline.
The Reserve Bank of India assured markets it would ensure sufficient liquidity and purchase debt via open market operations if required.
In ADR news, BHP Billiton ( BHP ) priced a US$5 billion bond issue, which includes some notes not due to mature for three decades.
Advantest ( ATE ) projected a yearly net loss because demand for chips has been weaker than anticipated.
The Nikkei ended up 1.22% at 14,799.12, the Hang Seng down 0.36% at 23,125.03 and the Straits Times up 0.66% at 3,243.29.
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