BANGKOK — Asian stock markets fell Wednesday ahead of a U.S. vote on raising the nation's borrowing limit.
Analysts
said that stock markets have room for gains if U.S. lawmakers make
progress on raising the debt ceiling. The House is set to vote on a
motion to increase the nation’s $16.4 trillion borrowing authority for
three months.
Without congressional action, the Treasury sometime
in late February or early March will not have enough money to pay for
all of its obligations, creating the possibility of a first-ever default
on the government’s debts.
“A vote is expected today, and if it
is passed as expected it should clear the very short term obstacles for
risk appetite, although battles on automatic spending cuts and the
budget itself are not so long away,” said analysts at Credit Agricole
CIB in a market commentary.
Japan’s Nikkei 225 index tumbled 1.3
percent to 10,566.59, a day after the country’s central bank announced
widely expected measures to help the economy, including open-ended asset
purchases starting in 2014. Some analysts said investors were
disappointed that the central bank didn’t take more aggressive measures.
Francis
Lun, managing director of Lyncean Holdings in Hong Kong, said the Bank
of Japan’s latest efforts won’t reverse two decades of stagnant growth
without addressing the country’s budget deficit and public debt, which
ballooned under years of efforts to stimulate the economy.
“They
are not doing anything to address the problem. They are just using the
same old methods, of printing money to sustain economic growth. If you
use that too often, it will lose its efficacy,” Lun said.
South
Korea’s Kospi shed 0.5 percent to 1,987.99. Hong Kong’s Hang Seng fell
0.4 percent to 23,559.29. Australia’s S&P/ASX 200 bucked the trend,
rising 0.2 percent to 4,787.80.
Among individual stocks, BHP
Billiton rose 1.3 percent in Sydney after the mining giant’s half-year
iron ore production results exceeded expectations. Japan’s Kobe Steel
plummeted 7.5 percent while banking giant Nomura Holdings fell 3.7
percent.
Strong earnings reports from big U.S. companies helped
push the Dow Jones industrial average to its eighth gain in nine
sessions Tuesday. The gains came despite a report showing sales of
previously occupied homes dipped in December from November.
The
news wasn’t as bad as it looked. Sales rose last year to 4.65 million, a
9.2 percent increase from the previous year and the most in five years.
The
Dow closed up 0.5 percent at 13,712.21. The Standard & Poor’s 500
index gained 0.4 percent to 1,492.56. The Nasdaq composite average rose
0.3 percent to 3,143.18. Tech behemoths Google and IBM reported solid
earnings gains after the market closed.
Benchmark oil for March
delivery was down 14 cents to $96.54 per barrel in electronic trading on
the New York Mercantile Exchange. The contract rose 68 cents to close
at $96.24 a barrel on the Nymex on Tuesday.
In currencies, the euro fell to $1.3309 from $1.3317 in New York on Tuesday. The dollar fell to 88.44 yen from 88.76 yen.
