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Asian stocks slip amid debt ceiling uncertainty, U.S.-China jitters

Published May 23, 2023 11:59PM ET
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Investing.com -- Most Asian stock markets retreated on Wednesday, tracking losses in U.S. stocks as a deal to raise the debt ceiling remained out of reach, while fears of worsening Sino-U.S. tensions also dampened sentiment towards the region.

Chinese stocks lagged most of their peers, with the Shanghai Shenzhen CSI 300 and Shanghai Composite indexes down 0.6% and 0.5%, respectively. Losses in Hong Kong-listed Chinese stocks pulled the Hang Seng down 1.1%.

China recently banned the use of U.S.-based Micron Technology's (NASDAQ:MU) chips in select sectors over security concerns, drawing ire from U.S. lawmakers. This also came as Beijing criticized the Group of Seven’s stance towards the country, as well as a recent trade agreement reached between the U.S. and Taiwan.

This largely outweighed comments from President Joe Biden that relations with China were set to improve, and ratcheted up concerns over a renewed trade war between the world’s two largest economies.

A slowing post-COVID rebound in China also cast a pall over local stocks, and also weighed on stock indexes with exposure to the country.

South Korea’s KOSPI lost 0.2%, while Australia’s ASX 200 index fell 0.5%. The Taiwan Weighted index was flat.

Japan’s Nikkei 225 slid 1.1%, while the broader TOPIX lost 0.5% as both indexes retreated from 33-year highs hit earlier in the week. Japanese stocks were widely seen as due for some profit taking after a stellar eight-session rally.

A Reuters poll forecast the Nikkei largely reversing its gains made in May by the year-end, as the Japanese economy slows.

Thailand's SET Index rose 0.2% as it recovered from a recent two-year low. But investors remained on edge over the formation of a new government, following a surprise defeat of the military junta in a recent election. The progressive Move Forward party announced this week that it had reached agreements with seven other parties to form a coalition government.

Other Asian markets retreated on Wednesday, as U.S. lawmakers signaled scant progress toward reaching a deal and avoiding a debt default. This comes ahead of an early-June deadline for a U.S. default, which could have dire consequences for the global economy.

Wall Street indexes slid in overnight trade, providing a weak lead-in to regional stocks.

A swathe of weaker-than-expected manufacturing readings from across the globe also rattled sentiment towards risk-driven assets, as traders grew more wary of a recession later this year.

Markets are now awaiting more cues on monetary policy from the minutes of the Federal Reserve’s May meeting, due later in the day.

Asian stocks slip amid debt ceiling uncertainty, U.S.-China jitters
 

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Salsabil Mansoul
Salsabil Mansoul Jul 11, 2023 12:02PM ET
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أبويزن نصر الدين
أبويزن نصر الدين May 24, 2023 3:13AM ET
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