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World markets down on worry over US debt showdown


October 07. 2013 6:36AM
Associated Press

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(AP) Global stocks slumped Monday after heated political rhetoric from the U.S. raised worries that the partial shutdown of the American government could bring the world's largest economy close to defaulting on its debt.


Japan's Nikkei index, the Asian heavyweight, tumbled by 1.2 percent to close at 13,853.32. Hong Kong's Hang Seng index dipped 0.7 percent to 22,973.95. Trading was nearly flat on South Korea's Kospi, which fell 0.1 percent to 1,994.42.


Australia's S&P/ASX 200 fell 0.9 percent to 5,161.10, but trading volumes were light due to holidays in some parts of the country. Benchmarks in Indonesia, India and Taiwan also fell. China's markets were closed Monday for a public holiday.


In Europe, early trading saw Germany's DAX index fall by 1.1 percent to 8,530.75. The FTSE index of major British stocks lost 0.9 percent to 6,396.47, and France's CAC-40 fell 1 percent to 4,121.16. Wall Street also appeared headed for losses, with Dow Jones industrial futures shedding 0.9 percent to 14,866. S&P 500 futures were 1 percent down at 1,668.


Investor anxiety has risen as the U.S. budget impasse between Republicans and the White House drags on.


On Sunday, Republican House of Representatives Speaker John Boehner ruled out a vote on a straightforward bill to raise the government's borrowing authority without concessions from President Barack Obama before an Oct. 17 deadline, moving closer to the possibility of default.


"This has really rattled markets and is likely to result in further near-term weakness for global equities," Stan Shamu, a market strategist for IG investors, said in a note to clients.


SMG investment group also cited the U.S. political showdown as the reason for Monday's anemic markets, saying in an advisory that "the latest comments from politicians showed no signs of progress to resolve the budget standoff."


Benchmark oil for November delivery tumbled $1.18 to $102.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to close at $103.84 on the Nymex on Friday


In currencies, the euro rose to $1.3578 from $1.3559 late Friday. The dollar fell to 96.98 yen from 97.31 yen.


Associated Press


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