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Asian markets fall as US shutdown nears

Posted by Nuttapon_S On September - 30 - 2013

Asian markets have fallen on fears that the US may be heading for a shutdown of government services.

The US needs to agree a new spending bill before the financial year ends at midnight on Monday. But political divisions have resulted in a stalemate.

There are worries over the economic impact of a failure to do so, which may see non-essential federal services shut and staff placed on unpaid leave.

Stock indexes in Japan, Hong Kong, Australia and South Korea all declined.

Japan’s Nikkei 225 index fell 2.2%, Hong Kong’s Hang Seng and Australia’s ASX dropped 1.3%, while South Korea’s Kospi shed 0.7%

“It is the fear of the unknown,” said David Kuo of financial website the Motley Fool. “No one knows what is really going to happen and markets don’t like uncertainty.”

“There is likely to be some reduction in US government spending, but we don’t know what areas are going to be affected.

“Until that is resolved, we are likely to see volatility in the markets,” he added.

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