Asia Roundup: Mixed on US debt warning

HONG KONG: Asian markets were mixed while the dollar faced heavy selling yesterday after Moody's warned it could downgrade the US' top-class debt rating, raising fears of a default by Washington.

Moody's blamed US lawmakers' failure to hammer out a deal that would allow President Barack Obama to raise the country's debt ceiling, in turn paving the way for it to meet its repayment obligations.

Ratings agency Standard's & Poor's in April also downgraded its outlook for the US, citing the budget deadlock.

With trillions of dollars of US debt held by countries and corporations around the world, a US ratings downgrade would likely send global markets into a downward spiral.

Tokyo's Nikkei-225 index fell 27.02 points to 9,936.12, with exporters hurt by the yen's strength against the greenback.

Hisatsune Kobayashi, general manager at SMBC Nikko Securities, said there was a momentary speculation that the Japanese government intervened in the currency markets, boosting shares, but gains were quickly shed as that speculation faded.

Shanghai's composite index gained 0.54 per cent, or 14.97 points at 2,810.44.

"The index is likely to continue to seesaw in the near term as investors haven't reached a consensus on what the central bank could do in the second half," Shenyin Wanguo Securities analyst Wei Daoke told Dow Jones Newswires, referring to the bank's monetary policy.

Sydney closed 0.53 per cent, or 24.1 points, off at 4,490.7.

Seoul was flat, edging up 0.43 points to close at 2,130.07.

In other markets:

* Taipei closed flat, edging down 6.71 points at 8,481.35.

* Manila rose 0.44 per cent, or 19.55 points, to 4,423.55.

* Jakarta rose 0.42 per cent, or 16.79 points, to 3,997.63.

* Bangkok edged up 0.23 per cent, or 2.51 points, to 1,079.91.

* Mumbai edged up 0.12 per cent in lacklustre trade. The benchmark 30-share Sensex index ended up 22.18 points to 18,618.2. - AFP