Gains in the regional market came after the Bank of Japan's Tankan index, which surveys confidence among the nation's large manufacturers, rose stronger-than-expected. Separately, China's official factory gauge increased for a third month, while the Reserve Bank of Australia left its key interest rate at 2.5%.
However, gain on the upside was marginal as investors assessed the impact of a partial shutdown of the US government after lawmakers in Washington missed a midnight deadline to find a compromise to continue funding the government.
There washope of a temporarily funding extension but that was dented as US lawmakers failed a midnight deadline to agree on budget talks, meaning the US government has gone into a partial shutdown of non-essential services for the first time in 17 years.
The shutdown will put as many as 800,000 federal employees out of work today, closing national parks and halting some government services after Congress failed to break a partisan deadlock. The Senate earlier voted 54-46 against a House funding bill that made changes to President Barack Obama's health-care legislation.
Among Asian bourses, share prices on Japanese market advanced, with the benchmark Nikkei Stock Average rising 0.2% to finish at 14484.72, as investors chased for bargain buying following steep correction prior day and dollar's rise to the mid-98 yen level. Meanwhile, stronger-than-expected BOJ's tankan business sentiment data also underpinned buying.
Japanese Prime Minister Shinzo Abe decided on Tuesday to go ahead with a plan to increase the national sales tax next year. I have decided to raise the consumption tax rate to 8% from 5% from April 1, Mr. Abe said at the beginning of a meeting of ruling party officials. Mr. Abe said raising the sales tax was necessary for maintaining the sustainability of the social security system for the next generation and confidence in Japanese government finances. He added that the government has put together a package of economic measures designed to minimize the impact of the tax and put the economy back on a growth trajectory.
The Bank of Japan on Tuesday released its quarterly Tankan business survey for September, showing that Sentiment among large Japanese companies sharply improved in the three months to September, paving the way for Prime Minister Shinzo Abe to go forward with plans to raise the nation's sales tax. The key diffusion index measuring sentiment among major manufacturers rose to plus 12 in September, from plus 4 in the previous June survey. The index for big non-manufacturers improved to plus 14 from plus 12, the highest since plus 16 in the December 2007 tankan. Large manufacturers revised their dollar/yen assumption rate to Y94.45 for this fiscal year compared with Y91.20 in June's survey.
The Ministry of Internal Affairs and Communications said in a preliminary report that average Japanese monthly household spending fell a price-adjusted 1.6% in August from a year earlier to 284,646 yen. The average monthly income of salaried households came to 471,411 yen, down 0.9% in real terms. Household spending figures are a key indicator of private consumption, which accounts for about 60% of Japanese gross domestic product.
In Australia, shares price in the Australian market finished weaker after moving in and out of neutral line during a session, amidst lingering concerns over the progress of the US budget talks. The benchmark S&P/ASX200 was down by 0.23% to finish at 5206.80, extending yesterday's 1.66% losses, with bullion, miners and energy blue chips leading the way down.
Shares of precious-metal miners were biggest drag in ASX after gold prices fell on Monday as investors took profit at the end of the quarter. The Comex December futures price lost 0.9% to $1,327.00 per ounce. Newcrest Mining down by 2.6% to A$11.40 and Perseus Mining lower by 0.9% to A$0.545.
Materials and resources blue chips also declined in Sydney on worries about metal demand after weaker than expected China manufacturing PMI data. BHP Billiton was lower by 0.7% to A$35.49 and Rio Tinto 1.1% to A$61.07.
The Reserve Bank has kept cash rate unchanged at 2.5% for the second consecutive month. The Board judged that the setting of monetary policy remained appropriate. The Board said it will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the target.
The Reserve Bank of Australia issued preliminary estimates of Commodity Prices index for September 2013 indicating that the index of commodity prices fell by 0.5% (on a monthly average basis) in SDR terms, after rising by 0.4% in August (revised). The largest contributor to the fall in September was the decline in the price of iron ore. The prices of base metals also fell, while the prices of coking coal and many rural commodities increased in the month. In Australian dollar terms, the index fell by 2.9% in September.
The latest ABS Retail Trade figures show that Australian retail turnover rose 0.4% in August 2013, seasonally adjusted, following a rise of 0.1% in July 2013. The largest contributor to the rise in August 2013 was department stores (6.4%) followed by cafes, restaurants and takeaway food services (0.4%), clothing, footwear and personal accessory retailing (0.3%) and food retailing (0.1%). These rises were partially offset by falls in household goods retailing (-0.6%) and other retailing (-0.2%).
In New Zealand, NZ shares mirrored mixed fortunes across Asian markets as traders watched for the deadline to pass for resolution of the US budget impasse. The NZX50 Index was up 7.485 points, or 0.16% to 4,743.87, despite more stocks recording share price falls than rises. Within the index, 19 stocks rose, 21 stocks fell, and 10 stocks were unchanged.
In Singapore, Singaporean share prices were trading edge higher, as concerns over the impact of a likely shutdown of the US government. The blue-chip Straits Times Index (STI) was trading 0.38% higher at 3,179.87 late afternoon.
Singapore home prices increased at the slowest pace in six quarters after the government introduced new loan measures to cool prices in Asia's second-most expensive housing market. The island-state's private residential property price index rose 0.4% to a record 216.2 points in the three months ended Sept. 30, after it climbed 1% in the second quarter, according to preliminary figures released by the Urban Redevelopment Authority today. That's the smallest gain since the first quarter of 2012, when the index dropped 0.1%.
In India, Indian markets recovered around afternoon after dipping in the morning, with the Sensex was trading 0.39% or 75.41 points higher at 19457.50, as investors shrugged off the impact of US government partially shutting down its services.
Bank stocks rose the most in BSE on renewed buying after the Reserve Bank of India (RBI) on Monday, 30 September 2013, said will infuse Rs 10000 crore into the banking system through open-market operations next week to ease liquidity constraints.
Elsewhere in the region, South Korea's benchmark Kospi Composite rose 0.1%. Taiwan's Taiex gained 0.16%. Indonesia's JKSE Composite jumped 0.96%. Malaysia's KLSE Composite added 0.1%. Markets in Hong Kong and mainland China were closed for holidays
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