HONG KONG: Asian shares fell yesterday as a budget deadlock in Washington showed no signs of ending, with investors growing nervous that the stalemate could trigger a damaging debt default.
As the stand-off approaches its fourth day, optimism that Republicans and Democrats would find an early solution to the crisis is giving way to fears over the potentially devastating impact of a default on the world economy.
Tokyo fell 0.94 per cent, or 132.94 points, to 14,024.31, Sydney closed 0.51 per cent, or 26.9 points, lower at 5,208.0 and Seoul shed 0.12 per cent, or 2.49 points, to 1,996.98.
Shanghai was closed for a public holiday.
While there are concerns about the US economy, the major worry is that politicians will fail to agree on raising the country's borrowing limit by the October 17 deadline.
Failure to increase the debt limit will see Washington run out of cash, leaving it unable to pay its bills or service its debt obligations.
In other markets:
* Taipei was flat, edging up 5.53 points to 8,364.55. Smartphone maker HTC rose 1.5 per cent to T$135 while Hon Hai fell 0.13 per cent to T$75.9.
* Wellington slipped 0.23 per cent, or 10.83 points, to 4,759.38. Fletcher Building was off 0.63 per cent at NZ$9.46 and Telecom fell 0.65 per cent to NZ$2.31.
* Manila ended flat, nudging up 2.83 points to 6,390.48. Universal Robina fell 4.88 per cent to 117 pesos, JG Summit rose 2.94 per cent to 42.00 pesos and Ayala Corp dropped 1.30 per cent to 606 pesos.
* Jakarta ended down 0.66 per cent, or 29.30 points, at 4,389.35. Food manufacturer Indofood Sukses Makmur fell 2.90 per cent to 6,700 rupiah, while Astra Agro Lestari lost 4.39 per cent to 18,550 rupiah.
* Bangkok lost 0.10 per cent, or 1.46 points, to 1,427.72. Telecoms company True Corp. added 3.01 per cent to 8.55 baht, while coal producer Banpu fell 0.89 per cent to 27.75 baht.
* Mumbai closed flat, up 13.88 points to 19,915.95. Sobha Developers gained 9.18 per cent to 318.74 rupees while Reliance Communications closed down 2.58 per cent to 147.25 rupees. AFP