U.S. Congress Fails to Negotiate on Debt Ceiling, Asian Stocks Jump

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U.S. Congress Fails to Negotiate on Debt Ceiling, Asian Stocks Jump
U.S. Congress Fails to Negotiate on Debt Ceiling, Asian Stocks Jump

U.S. Congress Fails to Negotiate on Debt Ceiling, Asian Stocks Jump

There seems no solution to the U.S. shutdown and debt ceiling as negotiations between Republicans and Democrats over the weekend failed to reach a conclusion. However, that does not seem to have an impact on Asian stock market as Japan’s Nikkei 225 stock average added 0.2 percent to 14,425.04 and Hong Kong’s Hang Seng gained 0.6 percent to 23,351.84.

Similarly, South Korea’s Kospi was in doldrums earlier was 0.8 percent higher at 2,036.56. It was a good trading day for Taiwan’s stock index which rose 0.9 percent to 8,347.55. Earlier Wall Street had a one of the best trading days in recent times where shares were boosted by signs that Washington was moving closer to a deal which they subsequently failed to reach.

Investors and Traders Hopeful about U.S. Debt Ceiling Solution

According to market observers two days from a deadline to increase the U.S. debt ceiling, traders and investors seem to focus on developments in Washington and what would the likely outcome be in Congress. The U.S. has been warned by IMF and China that it is facing a possible default, a scenario that could derail the U.S. economic recovery and roil international markets.

Traders and investors feel that anecdotal evidence show that the U.S. will settle for a solution; it is just a matter of time. According to them they are hoping that the U.S. can have a deal done to resolve the debt limit problem in coming days; this might be a reason that they are investing in Asian stocks unperturbedly.

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Casino Company and Tiremaker Gain

Though many of the indexes saw a rise, China’s Shanghai Composite index was on a declining mode and was down 0.3 percent to close at 2,230.62; this according to several market observers happened due to the recent economic data from China that shows that Chinese economy is still not able to stabilize after a prolonged slowdown.

Major gainer was James Hardie Industries SE, a maker of building materials that gets about 70 percent of sales from the U.S. Another company to gain in today’s trading is SJM Holdings Ltd. which is Asia’s biggest casino operator. Hankook Tire Co., South Korea’s No. 1 tiremaker, was in gain today; the company announced plans to build its first factory in the U.S.

There is no trading in the markets in Indonesia, Malaysia, Singapore and the Philippines as these are closed for holidays.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com