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Asia stocks muted on US government shutdown

Source: Agencies | October 3, 2013, Thursday | Online Edition

Asian stock markets today withstood some of the gloom seeping into other financial markets as the partial shutdown of the US government dragged on for a third day.

Some nonessential public services across the US ground to a halt earlier this week after Congress failed to approve short-term funding for the government after the fiscal year ended Monday. Some 800,000 federal workers have been put on unpaid leave and many agencies and programs across the US have been idled.

Analysts said investors in Asia were more or less expecting lawmakers from the two political parties to negotiate a solution or put the shaky US economic recovery at risk.

"I think people believe the Republicans and Democrats will come to their senses sooner or later, so they should stop behaving like children," said Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong.

Hong Kong's Hang Seng jumped 1 percent to 23,205.51. Forgame Holdings, an Internet video gaming company, soared 34 percent on the first day of trading in Hong Kong after a successful IPO. Investors attracted by China's rapidly growing online game market applied for more than 300 times the amount of stock sold in the company's initial public offering.

Japan's Nikkei 225 index rose 0.1 percent to 14,190.80. Australia's S&P/ASX 200 added 0.5 percent to 5,243.40. Benchmarks in India, Taiwan, Indonesia and Thailand also rose. Singapore's benchmark index fell. Markets in China's mainland and South Korea were closed for public holidays.

European Central Bank head Mario Draghi said that the partial US government shutdown was a risk to economic recoveries in the US and globally. Estimates suggest that a shutdown of two weeks could shave 0.3 percentage point from US fourth quarter growth, according to analysts at Credit Agricole CIB in Hong Kong.

"Moreover, the shutdown may interrupt some economic data releases," Credit Agricole's Michael Carey wrote in an email commentary.

The Labor Department will likely have to delay the release of its employment data for September, scheduled for Friday, "as they have reported that they will not collect data, issue reports, or respond to public inquiries during the shutdown," Carey said.

Among individual stocks, ANA Holdings rose 1.9 percent in Tokyo after the Japanese government said it will allot 11 new international departure and arrival slots to its carrier starting in March at Haneda airport, Kyodo News reported. That compares with new five slots to be given to Japan Airlines, which fell 1.9 percent.

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