Asian stocks gave way – with the regional benchmark retreating from four-month highs – on a day when US lawmakers again failed in their attempts to agree on raising the debt ceiling and recovery of government operations.
On the stock front, LG Electronics, the world's second largest TV maker, which gets 30% of its revenue from the US market, lost 0,6% in Seoul. Newcrest Mining, Australia's largest miner, fell 3,8% as the price of gold bullion hit quarterly lows. Copper active OZ Minerals fell 7,3% in Sydney after announcing a cut in its production forecast.
The MSCI Asia Pacific excluding Japan Index fell 0,2% to 471.77 as of 11:29 am in Sydney, on a day when Japanese and Hong Kong markets were closed for holidays.
"This is a situation that no one would want to experience because it causes great volatility in the markets," said Angus Gluskie, managing director of White Funds Management. “The two US political parties must find a solution. If there is no deal by Thursday, the markets will fall further. Investors are starting to be seriously worried given some signs of weakness coming from China”.
US Senate Majority Leader Harry Reid is negotiating with Minority Leader Mitch McConnell following the breakdown of talks between President Barack Obama and House Speaker John Boehner. Chinese exports fell unexpectedly in September. All eyes are now on inflation data from Beijing and New Delhi.
Australia's S&P/ASX 200 index slipped 0,6% and New Zealand's NZX 50 index fell 0,1 percent. South Korean Kospi had changed little.
