ASIA-Shares to struggle as U.S. debt vote waited

WELLINGTON: Asian stocks are set for another struggle as the uncertainty about the U.S. debt woes and scepticism that a deal will be done to avert a ratings downgrade weighs on sentiment.

The Dow Jones industrial average ended down 0.51 percent and the broader based Standard & Poor's 500 Index was down 0.32 percent, while the tech-laden Nasdaq Composite Index was flat.

The market was buoyed by data showing the number of Americans claiming new unemployment benefits last week fell to its lowest level since early April, while there was an unexpected rise in pending sales of existing U.S. homes.

But the impasse over the U.S. government debt ceiling and the looming Aug. 2 deadline weighed on sentiment.

The House of Representative was to vote on a Republican-led bill to raise the debt limit, as the Democratic-controlled Senate crafted a competing bill, and Democratic leaders said the House bill would be defeated in the Senate.

The CBOE Volatility Index rose 3.3 percent to the highest level since mid-June, with pricing reflecting in an increasing chance of a U.S. credit downgrade.

Asian stocks listed on Wall Street fell 0.42 percent while world stocks, as measured by the MSCI world equity index, eased 0.5 percent.

British shares rose 0.3 percent while European shares were fractionally positive.

The U.S. dollar climbed higher as investors waited to see if the proposed debt deal legislation is passed, while the euro eased on rekindled debt jitters.

Japanese markets, which fell sharply on Thursday to below the 200-day moving average, are seen broadly flat and cautious with Nikkei futures traded in Chicago 30 points below the last closing level in Osaka . Support for the Nikkei is seen around the 65-day moving average 9,720.

Australian stocks are seen softer with share price index futures down 0.1 percent to 4,427, a 36.8 point discount to the close of the underlying S&P/ASX 200 index. – Reuters