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Asian shares down as sentiment grows Fed taper likely on budget deal

Stock MarketsDec 11, 2013 11:37PM ET
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Investing.com - Asian shares traded weaker on Thursday on renewed concern that the U.S. Federal Reserve may start tapering its stimulus program after the U.S. Congress moved closer to a deal to pass a federal budget.

Hong Kong's Hang Seng index fell 0.52% at the ewnd of morning trade with the Shanghai Composite down 0.11% and Japan's Nikkei 225 off 1.61%.

South Korea's Kospi fell 0.6% and the S&P/ASX 200 fell 1.2% after November unemployment data that showed an increase to 5.8% from 5.7%, close to a post-financial crisis high.

The Hang Seng fell despite China Cinda Asset Management, Hong Kong's largest initial public offering this year, surging by nearl one third on its debut. The companu, which processes bad debt from Chinese banks and converts it into equity stakes, raised $2.5 billion in an IPO that priced at the top of its price range.

Overnight, U.S. stocks dropped after lawmakers agreed on a way out of a budget impasse, which left investors concluding the Federal Reserve is now more likely to begin tapering its USD85 billion in monthly bond purchases.

At the close of U.S. trading, the Dow Jones Industrial Average fell 0.81%, the S&P 500 index fell 1.13%, while the Nasdaq Composite index fell 1.40%.

Congressional Democrats and Republicans agreed on a deal setting a 2014 budget at USD1.012 trillion, and a 2015 budget at USD1.014 trillion in a fiscal compromise that would reduce automatic spending cuts and deficit levels by USD23 billion over two years.

The deal left investors betting that the U.S. central bank is closer to tapering the pace of its monthly asset purchases bet it next week or in a couple of months, which will take away some of the monetary support the Fed has give stock markets for over a year.

Leading Dow Jones Industrial Average performers included Visa, up 3.09%, Coca-Cola, up 0.66%, and Home Depot, up 0.46%.

The Dow Jones Industrial Average's worst performers included Nike, down 3.05%, UnitedHealth Group, down 2.67%, and Pfizer, down 2.25%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 0.47%, France's CAC 40 fell 0.10%, while Germany's DAX 30 fell 0.41%. Meanwhile, in the U.K. the FTSE 100 finished down 0.24%.

On Thursday, the U.S. is to produce data on retail sales as well as the weekly report on initial jobless claims.
Asian shares down as sentiment grows Fed taper likely on budget deal
 

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