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Asian stocks fall on lack of China economic clarity, Shanghai down 0.9%

Published 11/12/2013, 11:27 PM
Updated 11/12/2013, 11:37 PM
Investing.com - Asian shares fell on Wednesday partly linked to a lack of clarity on economic policies, including a timetable for a fully-convertible yuan, following a  senior leadership meeting in China that ended yesterday.

Hong Kong's Hang Seng Index fell 1.3% led by companies primarily Mainland based with the Hang Seng China Enterprises Index down 2%. The Shanghai Composite fell 0.9%.

Despite signs China will meet a growth target of 7.5% this year, the meeting known as the Third Plenum failed to set stronger guidance on economic policies as expected.

Asian shares are also down on prospects of tighter liquidity if the Federal Reserve moves in December, as many investors increasingly expect, to start tapering its USD85 billion a month bond-buying program.

Australia's S&P/ASX 200 fell 1% and South Korea's Kospi lost 1%. Japan's Nikkei was down 0.2% after a 3.6% gain over the past two sessions.

U.S. Treasury Secretary Jack Lew is in the Asian region this week with stops planned in Singapore, Malaysia, Beijing and Tokyo.

He told CNBC Asia on Wednesday that budget talks in the U.S. need to come up with spending cuts and more revenues.

"A mix of balanced policies where they are talking about both revenue and spending options and let's see where they go, " Lew said about talks between Republicans and Democrats on a budget for the current year, which he said should hopefully avoid a repeat of a standoff that shutdown the government.

Lew did not mention current dollar strength linked to expectations the U.S. Federal reserve may soon begin to taper its USD85 billion a month asset purchase program as early as December.

But he did say any economic recovery in the United States needs to be underpinned by growth in Asia and Europe as well.

"Demand growth is critical. U.S. growth cannot make up for a lack of demand growth in either Asia or Europe."

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