Sunday, March 03, 2013 10:13 pm
Asia stocks fall amid US budget impasse
By PAMELA SAMPSONAP Business Writer
President Barack Obama and his political opponents have failed so far to agree on a way to roll back automatic spending cuts that took effect Friday. Those cuts slash $85 billion from the nation's budget, which could slow down the economy.
U.S. lawmakers say they want to undo the cuts so that federal programs can be spared but are divided over whether higher taxes should be used to pay for them.
Evan Lucas of IG Markets in Melbourne said he believes the budget fight is just "another political distraction that will cause some investors to cash out and buy back in on the dips."
Hong Kong's Hang Seng fell 1 percent to 22,646.46. South Korea's Kospi shed 0.3 percent to 2,019.64. Australia's S&P/ASX 200 lost 1.2 percent to 5,026.80.
Japan's Nikkei 225 index reached its highest intraday level since September 2008 before retreating slightly to 11,674.90, a gain of 0.6 percent.
Investors are seemingly in a buoyant mood ahead of a leadership change at the Bank of Japan. Gov. Masaaki Shirakawa will step down March 19, making way for a new chief who supports Prime Minister Shinzo Abe's call for bolder monetary easing. The central bank meets Wednesday and Thursday for a regular monetary policy review.
A positive manufacturing report pushed Wall Street higher on Friday. The Dow Jones industrial average rose 0.3 percent to close at 14,089.66. The Standard & Poor's 500 index rose 0.2 percent to 1,518.20. The Nasdaq composite gained 0.3 percent to 3,169.74.
U.S. manufacturing expanded in February at the fastest pace since June 2011. The Institute for Supply Management said that its index of factory activity rose in February to 54.2, up from January's reading of 53.1. A reading above 50 indicates expansion.
Benchmark oil for April delivery was down 7 cents to $90.61 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.37 to close at $90.68 a barrel on the Nymex on Friday.
In currencies, the euro fell to $1.3009 from $1.3017 late Friday in New York. The dollar fell to 93.32 yen from 93.58 yen.