Asia-Pacific stocks sway as Wall Street rises and U.S. budget talks stall

Asia-Pacific equity markets opened Wednesday with uneven moves, mirroring cautious sentiment after fresh records on Wall Street and looming uncertainty over U.S. federal funding.

Mixed opening across the region

Japan’s benchmark Nikkei 225 fell 1.05% at the start of trading, while the broader Topix slipped 1.52%. The retreat followed the Bank of Japan’s third-quarter Tankan survey, which showed large manufacturers’ sentiment improving to +14 from +13 in the previous quarter. Economists surveyed ahead of the release had anticipated a reading of +15. The non-manufacturing index remained unchanged at +34, indicating stable confidence in the services sector.

South Korea moved in the opposite direction. The blue-chip Kospi added 0.68%, and the tech-heavy Kosdaq gained 0.77%, reflecting buying interest in semiconductor and healthcare shares. In Australia, the S&P/ASX 200 edged 0.25% lower as declines in mining stocks outweighed modest gains in the financial segment.

Equities on mainland China and in Hong Kong were closed for a public holiday, removing two of the region’s largest trading venues from mid-week price discovery.

Wall Street extends rally despite budget threat

Overnight in New York, the S&P 500 advanced 0.41% to 6,688.46, and the Nasdaq Composite climbed 0.31%, closing at 22,660.01. The Dow Jones Industrial Average added 81.82 points, or 0.18%, finishing at a record 46,397.89. Gains were driven by large-capitalization technology and consumer discretionary stocks, even as lawmakers in Washington searched for agreement on a second short-term spending bill.

Failure to pass new funding could trigger a partial federal government shutdown after the current stopgap measure expires at the end of the week. According to Reuters, negotiators remain divided on several provisions, raising the prospect of disrupted public-sector operations and delayed economic data releases.

Central-bank decisions in focus

While the latest Tankan numbers shaped trading in Tokyo, investors elsewhere prepared for policy guidance from the Reserve Bank of India. The Indian central bank was scheduled to announce its interest-rate decision later in the session, with most economists expecting the benchmark repo rate to stay unchanged amid steady inflation readings.

Currency markets were quiet ahead of the decision. The Japanese yen hovered near 149 per U.S. dollar, held back by interest-rate differentials, while the Australian dollar traded around 0.64 U.S. cents.

Imagem: Internet

Sector highlights and outlook

Energy producers in Sydney struggled as global crude prices eased on concerns that a U.S. shutdown could dampen short-term demand. Conversely, South Korean chipmakers benefited from expectations of a rebound in memory prices during the first half of next year.

Analysts noted that overall volumes were subdued, partly because of the holiday closures in China and Hong Kong. Many market participants also preferred to await clarity on both U.S. fiscal negotiations and upcoming inflation reports in major economies.

Despite the cautious tone in Asia, the sustained advance on Wall Street continued to set a constructive backdrop for global risk assets. Traders will monitor whether strong U.S. corporate earnings can offset the drag from political gridlock in Washington.

For ongoing updates on policy moves and their impact on household budgets, visit our Finance News Update section.

Image credit: Mongkol Chuewong | Moment | Getty Images