Asian Shares Retreat On U.S. Debt Ceiling Worries

Asian stocks fell on Wednesday as worries over the U.S. debt ceiling persisted and investors awaited cues from industrial sector surveys in Europe and the United States.

Spot gold edged lower, and the dollar index held steady as another round of U.S. debt ceiling negotiations ended without a resolution.

The kiwi dollar came under pressure against other major currencies after the Reserve Bank of New Zealand surprised markets with a dovish 25 basis point rate hike, saying that this would be the final rate hike of the current tightening cycle.

Oil prices hit three-week highs after a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts.

Chinese markets tumbled amid mounting concerns over the outlook for the country’s economy. The benchmark Shanghai Composite Index slumped 1.3 percent to 3,204.75, while Hong Kong’s Hang Seng Index plunged 1.6 percent to 19,115.93.

Japanese shares fell notably as concerns over the U.S. debt limit impasse overshadowed survey results showing that business sentiment at big manufacturers turned positive for the first time in 2023.

The Nikkei 225 Index fell 0.9 percent to 30,682.68, while the broader Topix Index settled 0.4 percent lower at 2,152.40.

Cosmetics giant Shiseido slumped 5.6 percent and CyberAgent Inc., a major investor in a new share sale in Rakuten Group Inc., tumbled 4.7 percent. Rakuten shares gave up 2 percent.

Toyota Motor jumped 5.4 percent, rebounding from a sudden plunge in the final minute of trading on Tuesday.

Seoul stocks ended on a flat note as data showed business sentiment improved slightly for June. The Kospi finished marginally lower at 2,567.45.

Australian markets ended lower, dragged down by miners and healthcare stocks. The benchmark S&P/ASX 200 Index dropped 0.6 percent to 7,213.80, while the broader All Ordinaries Index closed 0.7 percent lower at 7,392.90.

Mining heavyweights BHP and Rio Tinto fell over 2 percent, tracking weak iron ore prices in top steel producer China.

Across the Tasman, New Zealand’s benchmark S&P/NZX-50 Index rose 0.2 percent to 11,971.83 as the Reserve Bank indicated that the tightening cycle is over.

Investors shrugged off data showing New Zealand’s retail sales volume fell an annual 4.1 percent in the first quarter of 2023, marking its second straight quarterly contraction.

U.S. stocks fell sharply overnight, as growing worries over raising the nation’s debt limit overshadowed data showing fairly sharp growth in U.S. private sector activity and a jump in new home sales to a level not seen in over a year.

The Dow shed 0.7 percent, the S&P 500 dropped 1.1 percent and the tech-heavy Nasdaq Composite gave up 1.3 percent as another round of debt ceiling talks ended without an agreement.

Source: Read Full Article