Asian markets retreat as US fiscal cliff fears grow

Asian markets mostly fell on Friday after Republicans scrapped a vote on putting in place a back-up plan if talks on averting the US fiscal cliff end in failure.

The news out of Washington late Thursday cancelled out a rally on Wall Street and upbeat data on the US economy, while it also hit currency traders, who have sent the safe-haven yen higher despite more Bank of Japan monetary easing.

Tokyo fell 0.99 percent, or 99.27 points to 9,940.06, Seoul shed 0.95 percent, or 19.08 points, to 1,980.42 and Sydney was 0.23 percent lower, losing 10.5 points to end at 4,623.6.

Hong Kong slid 0.68 percent, fell 153.49 points to close at 22,506.29, while Shanghai lost 0.69 percent, or 15.04 points, to end at 2,153.31.

With just under two weeks to go before huge tax hikes and spending cuts are due to kick in -- and likely tip the economy into recession -- US lawmakers are still unable to reach a compromise that will avert the fiscal cliff.

Late Thursday in Washington Republican House Speaker John Boehner scrapped a vote on a bill that would have extended tax cuts for all Americans earning less than $1 million even if a wider deal could not be struck.

The move, which he described as his "Plan B", was dropped because he did not have enough support. Boehner said his party would recess until after Christmas.

The measure had been blasted by President Barack Obama's Democrats as a diversionary tactic that would never have passed in the Senate, where they hold a majority.

Now both parties must come up with a budget that will cut the country's deficit with less painful measures before the start of January, when they take effect.

Wall Street ended in positive territory on Thursday, however, lifted by fresh data further indicating the US economy is getting back on its feet.

The Commerce Department said the economy grew 3.1 percent in the third quarter, up from the estimates of 2.7 percent and 2.0 percent previously stated.

The figure reflects upward revisions to consumer spending, exports and government outlays, and a downward revision to imports.

Also Thursday the National Association of Realtors said existing home sales rose 5.9 percent month-on-month in November to their highest level in three years.

The Dow rose 0.45 percent,the S&P 500 gained 0.55 percent and the Nasdaq climbed 0.20 percent.

Thursday's delay in Washington sent the yen higher in Asian trade. The dollar bought 84.05 yen against 84.38 yen in New York late Thursday. The euro was at $1.3204 and 111.00 yen compared with $1.3241 and 111.72 yen.

However, the Japanese unit is still being pressured after the country's central bank announced fresh monetary easing Thursday, while dealers expect further measures in the new year when the new government is in control.

Oil prices fell, with New York's main contract, light sweet crude for delivery in February down $1.00 to $89.13 a barrel and Brent North Sea crude for February falling 53 cents to $109.67.

Gold was at $1,648.01 at 1045 GMT compared with $1,668.30 late Thursday.

In other markets:

-- Taipei fell 0.99 percent, or 75.53 points, to 7,519.93.

Taiwan Semiconductor Manufacturing Co. was 1.25 percent lower at Tw$94.8 while leading smartphone maker HTC rose 1.63 percent to Tw$280.0.

-- Manila closed 0.45 percent higher, adding 26.20 points to 5,823.94.

Metropolitan Bank and Trust rose 2.06 percent to 101.70 pesos and Philippine Long Distance Telephone gained 1.18 percent to 2,570 pesos.

-- Wellington fell 0.51 percent, or 20.71 points, to 4,054.74.

Air New Zealand was down 0.78 percent at NZ$1.28, Fletcher Building shed 2.37 percent to NZ$8.25 and Telecom eased 2.59 percent to NZ$2.26.

-- Singapore closed up 0.54 percent, or 16.95 points, at 3,175.52.

Singapore Telecom rose 0.60 percent to Sg$3.37 and DBS Group gained 0.54 percent to Sg$14.99.

-- Bangkok shed 0.07 percent or 1.00 points to close at 1,377.40.

Coal producer Banpu fell 1.42 percent or 6.00 baht to 418.00 baht while PTT Plc was unchanged at 333.00 baht.

-- Jakarta ended down 21.04 points, or 0.49 percent, at 4,254.82.

Carmaker Astra International fell 2.60 percent to 7,500 rupiah, cigarette maker Gudang Garam lost 2.73 percent to 57,000 rupiah, while palm oil producer Astra Agro Lestari decreased 1.62 percent to 18,250 rupiah.

-- Kuala Lumpur shares gained 4.96 points, or 0.30 percent, to close at 1,670.60.

British American Tobacco added 1.7 percent to 60.50 ringgit, rose 1.5 percent to 5.36 and Axiata climbed 1.2 percent to 6.68.

-- Mumbai fell 1.09 percent or 211.92 points at 19,242.0 points.

Jet Airways slid 7.03 percent to 566.5 rupees while Jindal Steel fell 3.52 percent to 454.25 rupees.


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