Asia Roundup: Spooked by fear of US default

HONG KONG: Asian stocks fell yesterday as US talks
aimed at raising the country's debt limit fell apart, raising the
spectre of a default, although losses were muted on expectations a deal
would be reached.

The crisis weighed on the dollar, sending it
to its lowest level against the yen since just after the March 11
earthquake in Japan, which prompted intervention by Tokyo and its Group
of 7 partners.

In Tokyo, the Nikkei 225 Index closed 0.81 per cent lower, giving up 82.10 points to 10,050.01.

Seoul shed 0.96 per cent, or 20.75 points, to end at 2,150.48 and Sydney fell 1.58 per cent, or 72.50 points, to finish at 4,530.40.

Shanghai's
composite index suffered the biggest single-day fall since January 17,
slumping 2.96 per cent, or 82.04 points, to 2,688.75 after a high-speed
train crash at the weekend in which dozens died led to a sell-off in
rail firms.

"The market has been expecting investment growth
to recover in the second half, but the latest accident may prompt the
government to overhaul infrastructure projects and slow the pace of
investment," Sinolink Securities analyst Xu Wei said.

High-speed railway equipment makers fell sharply, with China CNR tumbling 9.7 per cent and CSR falling 8.9 per cent.

With
just over a week to go before the US runs out of money to repay its
debt, President Barack Obama and his Republican opponents remain
deadlocked on talks over a deficit-cutting budget that will allow for
more borrowing.





However, despite rising concerns, many traders expect Republicans,
Democrats and the White House will reach an agreement to avoid a
default.

In other markets:

* Taipei fell 0.93 per cent, or 81.81 points, to 8,683.51.

* Taipei fell 0.93 per cent, or 81.81 points, to 8,683.51. * Bangkok rose 0.58 per cent, or 6.54 points, to 1,127.58.

* Bangkok rose 0.58 per cent, or 6.54 points, to 1,127.58. * Manila closed flat, edging up 2.14 points to 4,480.50.

* Manila closed flat, edging up 2.14 points to 4,480.50. * Jakarta fell 0.48 per cent, or 19.72 points, to 4,087.09.

* Jakarta
fell 0.48 per cent, or 19.72 points, to 4,087.09. * Mumbai shares rose
0.80 per cent, boosted by telecoms. The benchmark 30-share Sensex index
closed up 148.99 points to 18,871.29. - AFP* Mumbai shares rose 0.80 per
cent, boosted by telecoms. The benchmark 30-share Sensex index closed
up 148.99 points to 18,871.29. - AFP