Tags: World | Markets | sequestration

Stocks Slip as US Budget Impasse Looms

Friday, 01 Mar 2013 06:40 AM


Global stock markets were mostly lower Friday, as investors grew wary over the prospect of impending spending cuts by the U.S. government.

Some $85 billion in cuts are due to take effect today as part of a previous budget agreement between the White House and Congress. The planned "sequester" could hit U.S. growth if no deal is reached to avoid it.

"Some investors are in a wait-and-see mode," said Linus Yip, a strategist at First Shanghai Securities in Hong Kong.

Yip said sentiment, while cautious, was underpinned by expectations that monetary easing will continue as central banks endeavor to minimize any potential impact if the U.S. budget standoff is not resolved.

European share prices were lower in morning trading Friday, after British manufacturing figures came in worse than expected and unemployment in the 17-country euro area rose to 11.9 percent from 11.8 percent in December. The FTSE 100 index of leading British shares was down 0.4 percent at 6,335.36, while Germany's DAX fell a full percent to 7,666.44. The CAC-40 in France was down most, falling 1.1 percent to 3,682.50

Futures showed a similar trend for Wall Street. Dow futures were down 0.5 percent at 14,021, while S&P 500 futures shed 0.1 percent to 1509.25

In Asia, Tokyo's Nikkei 225 stock index gained 0.4 percent to 11,606.38 on expectations that the Bank of Japan will push ahead with more drastic monetary easing under its future new governor, Haruhiko Kuroda. Kuroda, whose nomination for the post requires parliamentary approval, is expected to succeed the current BOJ governor, Masaaki Shirakawa, when he steps down on Mar. 19.

Elsewhere in Asia, markets were lower as China's manufacturing grew at its weakest rate in five months in February as demand faltered and factories shut down for the Lunar New Year holiday. Hong Kong's Hang Seng dropped 0.6 percent to 22,880.22. Australia's S&P/ASX 200 shed 0.4 percent to 5,086.10. South Korean markets were closed for a public holiday. Mainland China's benchmark fell 0.3 percent to 2,359.51.

Markets in Taiwan, Singapore and Malaysia were higher while shares in the Philippines and New Zealand lost ground.

Wall Street got a temporary boost Thursday from news the U.S. economy grew at an annualized rate of 0.1 percent in the final three months of 2012 instead of contracting as estimated earlier. But gains faded at the end of the session on fears that no deal to resolve the impasse over the spending cuts would be forthcoming. The Dow Jones industrial average shed 20 points, or 0.2 percent, to 14,054.

That's 110 points below the record close it reached in October 200, though it came within 15 points of that level during the day Thursday. The Standard & Poor's 500 index ended down a point, or 0.1 percent, at 1,514. The Nasdaq composite lost two points, or 0.1 percent, to close at 3,160.

The U.S. dollar has rallied this week thanks to positive economic news and rising tensions over Italy. The euro was down 0.1 percent at $1.3043 while the dollar was up 0. 3 percent at 92.85 yen.

Benchmark crude for April delivery was down 93 cents or 1.1 percent to $91.00 a barrel in electronic trading on the New York Mercantile Exchange.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

1Like our page

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

America's News Page
©  Newsmax Media, Inc.
All Rights Reserved