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Asia stocks mixed after U.S. budget deal; Nikkei up 0.83%

Published 10/17/2013, 02:45 AM
USD/JPY
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Investing.com - Asian stocks were mixed on Thursday, as U.S. policymakers reached an agreement to reopen the government and avoid a sovereign default by extending the debt ceiling.

During late Asian trade, Hong Kong’s Hang Seng slipped 0.10%, Australia’s ASX/200 Index rose 0.38%, while Japan’s Nikkei 225 gained 0.83%.

Market sentiment improved amid relief over the last minute deal to avert an unprecedented U.S. sovereign debt default.

The deal will fund the government until January 15 and raise the government borrowing limit until February 7. Both sides also agreed to talks over broad budget issues in an attempt to reach a longer-term deal by December 13.

The agreement came with just hours to spare before the deadline to raise the USD16.7 trillion debt ceiling.

President Barack Obama signed the bill into law early on Thursday morning and pledged to begin reopening the government "immediately."

However, investors remained concerned over the economic impact of the government shutdown and the possibility of another debt crisis, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.

In Tokyo, the Nikkei gained ground as the yen held weakened against the U.S. dollar, boosting sentiment.

USD/JPY traded at 98.44. A weaker yen increases the value of overseas income at Japanese companies when repatriated, improving the outlook for export earnings.

Consumer electronics group Nintendo was sharply higher, with shares up 1.94%.

Financials also added to gains, as Sumitomo Mitsui Financial and Mitsubishi UFJ rallied 1.77% and 1.11% respectively.

Meanwhile, in Hong Kong, the Hang Seng edged lower in cautious trade as investors looked ahead to a raft of Chinese economic data on Friday.

The Asian nation is scheduled to release a government report on third quarter gross domestic product, as well as data on industrial production and retail sales figures for September.

Elsewhere, in Australia, the ASX/200 Index climbed higher, despite losses in mining and energy stocks.

Newcrest Mining and Fortescue Metals declined 0.59% ans 2.96% respectively, despite posting higher production figures for the third quarter, while Woodside Petroleum tumbled 1.35% after reporting an annual 17% fall in production.

Looking ahead, European stock market futures pointed to a lower open.

The EURO STOXX 50 futures pointed to a loss of 0.37% at the open, France’s CAC 40 futures fell 0.27%, London’s FTSE 100 futures indicated a drop of 0.31%, while Germany's DAX futures pointed to a loss of 0.27% at the open.


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