Regional market moved in narrow range as investment appetite for risk assets were on the edge as investors closely monitoring Washington's budget deadlock ahead of the deadline for raising the debt ceiling. Politicians in Washington remained deadlocked over a deal to reopen the government and avoid default on its debts. Thursday is the deadline set by the Treasury Department to raise the federal borrowing limit.
Meanwhile, risk sentiments weakened further after ratings agency Fitch placed the US government's triple-A credit rating on a ''negative watch'', on fears the deadline won't be met and the government will default on its loans.
Many investors took a wait-and-see approach on caution ahead of Oct 17 deadline for the US Congress to extend the government's borrowing limit. Without legislative action, the U.S. could default on its debt obligations at a time when the global economy is still recovering from the financial crisis.
The Republican leadership failed to muster enough support for its own plans to avert default, with just over a day to raise the debt ceiling by the Oct 17 deadline. Fitch ratings agency said it may downgrade Washington's AAA credit rating. And the U.S. Treasury has warned that if Congress does not lift the $17.6 trillion debt ceiling by Thursday, it will lose its ability to borrow and could run out of cash to pay all its obligations.
Among Asian bourses, Japanese market closed slight higher after fluctuating between gains and losses, with the benchmark Nikkei Stock Average rising 0.18% to 14467.14 while the broader Topix index lost 0.06% to 1196.78 on Wednesday, 16 October 2013.
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Softbank Corp shares rose 2.2% to 7400 yen amid news the mobile telecom was in talks to buy a stake in U.S. mobile-phone distributor Brightstar Corp. That move would follow Softbank's agreement Tuesday to buy a 51% stake in Supercell, a Finnish mobile-game maker, for 150 billion yen.
Tokio Marine Holdings jumped 3.1% to 3175 yen on a Nikkei report that the firm has decided to merge two life insurance units next October as part of efforts to lower administrative costs and enhance product development capabilities. Tokio Marine & Nichido Life Insurance Co. will absorb Tokio Marine & Nichido Financial Life Insurance Co.
Japan Tobacco dropped 2% at 3450 yen on concerns over potential slowdown in sales after a Yomiuri Shimbun report that the firm is considering raising its cigarette prices by as much as Y20/pack from the next FY starting in April.
In Australia, Australian financial market finished mixed, amid a mixture of good and bad news about the US debt ceiling negotiations. The benchmark S&P/ASX200 advanced 3.80 points, or 0.07%, to 5262.90, while the broader All Ordinaries grew 5.20 points, or 0.1%, to 5264.40.
Sydney market opened in the red as politicians in Washington remained deadlocked over a deal to reopen the government and avoid default on its debts. Meanwhile, risk sentiments weakened further after ratings agency Fitch placed the US government's triple-A credit rating on a ''negative watch'', on fears the deadline won't be met and the government will default on its loans. However, stocks pulled off their morning lows and managed to finish above boundary line on hopes Congress will pass a bill raising the US government's borrowing limit by the October 17 deadline.
Shares of materials and resources companies finished solidly higher in Sydney, with Rio Tinto's solid quarterly production numbers yesterday is helping lift its shares by a further 1.4% to A$64.11, on the top of 2.5% gain prior day. The larger BHP Billiton (BHP), which would issues its September quarter production figures on 22 October, was up 1.1% to A$35.78. Iron ore producer, Fortescue Metals (FMG) rose 2.7% to A$5.40.
Brambles shares climbed up 1% to A$9.38 after the company said sales revenue for its pooling solutions operations rose thanks to its acquisition of container company Pallecon late in 2012. The pooling business which provides pallets and containers to businesses received A$1.38 billion for the three months to the end of September, an increase of seven% on the same time last year. The group said the increase reflected new business and the contribution of Pallecon which Brambles acquired for A$170 million in December. Brambles pooling solutions does not include the companys Recall information management business, which it plans to demerge. Brambles said it remained on track to deliver an underlying profit of between $US930 million and $US985 million for the 2014 financial year.
CSL shares rose 1.4% to A$66.26 after the blood products and vaccines maker announced at its AGM today that it would buyback close to A$950 million shares over the next 12 months due in part to slow growth. The blood products group reaffirmed expectations for a 10% increase in underlying profit growth.
In China, headline shares on the Chinese market tumbled, dragging the benchmark Shanghai Composite index lower by 1.8% to 2193.07. Selloff in the Shanghai market came as investors sold to book profit on concerns a potential flood of new shares may dilute market value. Meanwhile, selling pressure intensified further after JPMorgan Chase & Co. advised reducing holdings and companies linked to Shanghai's free-trade zone tumbled on concern valuations are excessive.
Shares of Shanghai's free-trade zone companies tumbled as profit taking emerged amid concern valuations are excessive. Shanghai's related stock jumped sharply in recent month boosted by speculation the city's free-trade zone will attract foreign companies and allow for financial liberalization. The China Securities Regulatory Commission today denied market speculation the zone will introduce an international stocks board, saying rules don't allow foreign companies to sell shares in the trade area.
Shanghai Waigaoqiao declined 9.5% to 46.19 yuan, paring gains to 211% since Aug. 22, when the Commerce Ministry said the government approved a trade area in the city. Shanghai International Port dropped 8.9% to 5.24 yuan, trimming a rally since Aug. 22 to 105%.
Shares of property developers declined steeply in Chinese market on concern of potential tightening in the sector after the Communist Party's Third Plenary Session in November. Among realty stocks, Vanke, the nation's biggest listed property developer, fell 1.3% to 9.07 yuan. Poly Real Estate, the second-largest developer, fell 2.3% to 9.61 yuan. Gemdale Corp. declined 2.6% to 5.91 yuan. Shanghai Lujiazui Finance & Trade Zone Development Co. plunged 10% to 22.79 yuan.
In Hong Kong, HK shares were giving back some of the gains logged over the past two sessions, as investors moved to lock in gains on caution ahead of Washington's budget deadlock deadline for raising the debt ceiling. The Hang Seng Index closed today at 23228.33, down 108.19 points or 0.46%, after touching a lowest of 23128.69 during the day.
Among the 50 HK blue chips, seven rose and 40 fell, with three stocks remaining steady. CR Power (00836) gained 1.2% to HK$19.58, while China Merchants (00144) fell 2.7% to HK$28.8, making themselves the top blue-chip winner and loser.
Heavyweights HSBC, China Mobile and AIA fell 0.29%, 0.82% and 0.91% to HK$84.9, HK$84.25 and HK$38.2, respectively. Elsewhere, the HK government granted two new free-to-air TV licences. The loser HKTV (01137) plunged 33.9% to HK$2.03, while the winners I-cable (01097) and PCCW (00008) soared 155% and 4.6% to HK$1.2 and HK$3.64. TVB (00511) inched up 0.3% to HK$48.8. Prince Frog (01259) plunged 25.7% to HK$4.66 before suspension after short-selling research house Glaucus initiated coverage of the company with strong sell. It said the company is worth HK$0.74 to HK$0.98 per share.
Elsewhere in the region, Indonesia's Jakarta Composite Index shed 0.61%. South Korea's KOSPI fell 0.31%. Taiwan's Taiex lost 0.43%. New Zealand's NZX 50 Index rose 0.23%. Malaysia's KLSE Composite rose 0.37%. Singapore's Straits Times index was up 0.28%. Indian stock was market closed for public holiday.
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