By Carla Mozee, MarketWatch
LOS ANGELES (MarketWatch) -- Equities across Asia seesawed
Wednesday as investors watched to see if Washington will craft a
deal to raise the debt ceiling in time to meet Thursday's
deadline.
The U.S. Senate was due to convene at noon Wednesday after
Senate leaders late Tuesday restarted their negotiations on
reopening the government and lifting the debt ceiling. The new
round of talks came after a plan by House Republicans to vote on
their own proposal fell apart.
Australian stocks had turned higher as reports emerged that
Senate Majority Leader Harry Reid and Minority Leader Mitch
McConnell were optimistic about reaching an agreement on a bill.
The S&P/ASX 200 closed with a modest 0.1% increase.
Japanese stocks darted in and out of positive territory, putting
the Nikkei Stock Average up less than 1 point, and the broader
Topix down by 0.3%.
Chinese stocks, however, were solidly lower. Hong Kong's Hang
Seng Index fell 0.6%, giving back some of the gains logged over the
past two sessions, while the Hang Seng China Enterprises Index also
shed 0.7%. On the Chinese mainland, the Shanghai Composite dropped
1.7%.
Investors in Chinese assets were also awaiting Friday's release
of government data, including third-quarter gross domestic
product.
The lackluster tone to Asian trade came after U.S. debt-limit
and shutdown concerns helped send Wall Street stocks lower, leaving
the Dow Jones Industrial Average (DJI) down 133 points, or 0.9%, at
15,168.01, and the S&P 500 index (SPX) off 0.7% a day after
closing at a three-week high.
Fitch Ratings after the close of U.S. equity trading Tuesday
said it may downgrade the nation's AAA credit rating, citing the
prolonged congressional negotiations over lifting the borrowing
limit.
Each week of the U.S. government shutdown has shaved off 0.1% to
0.25% from fourth quarter U.S. GDP growth, according to an estimate
from economists at Société Générale.
Likewise, several consumer and business indicators have already
reflected "a rapid decline in confidence as uncertainty has been
compounded by the debt-ceiling gridlock," wrote Société Générale
cross-asset strategists led by Patrick Legland.
Major Treasury holders, namely Japan and China, are asking the
U.S. administration "to find a clean solution" to the impasse, said
Société Générale, adding that Japanese investors sold record
amounts of foreign bonds in early October, the largest outflows
since 2001.
"However, the U.S Treasury market remains the world largest and
most liquid bond market, which does not leave investors with many
alternatives," they said.
In Hong Kong on Wednesday, stock in Hang Seng Index heavyweights
HSBC Holdings PLC (HBC) and China Mobile Ltd. (CHL) each gave up
0.6%. Among the retail group, shares of Li & Fung Ltd. (LFUGY)
, a Wal-Mart Stores Inc. (WMT) supplier, gave up 1.3%.
In Tokyo, meanwhile, shares of Softbank Corp. (9984.TO) stood
out, rising 2.1% amid news the mobile telecom was in talks to buy a
stake in U.S. mobile-phone distributor Brightstar Corp. That move
would follow Softbank's agreement Tuesday to buy a 51% stake in
Supercell, a Finnish mobile-game maker, for 150 billion yen ($1.52
billion).
Meanwhile, shares of Hong Kong Television Network Ltd. tumbled
32% after the Hong Kong government rejected the company's
application for a free-TV license. HKTV, which had invested in
infrastructure and other efforts to win the license, said it will
cut 320 employees.
But PCCW Ltd. and I-Cable Communications Ltd. each won free-TV
licenses, prompting shares of I-Cable to more than double, and PCCW
shares to climb 10%.
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