Asian stocks down again on US gridlock Australian CPI higher than expected

Asian stocks were lower again today led by exporters and banks, on concern the global economic recovery will stall as a political stalemate continues over raising the U.S. debt ceiling. The MSCI Asia Pacific Index lost 0.1% 139.02 at noon in Tokyo. About five stocks fell for every three that rose on the index which is on course for a decline this week as U.S. lawmakers struggle to reach an agreement to raise the federal debt limit before an Aug. 2 deadline, increasing concern that the government of the world’s biggest economy may default on its debt.

Japan’s Nikkei 225 Stock Average fell 0.6% as the yen strengthened against the dollar, cutting the profit outlook for the nation’s exporters. South Korea’s Kospi index lost 0.2% while Australia’s S&P/ASX 200 Index slipped 0.4%. 

In economic news, Australia’s inflation rate gained more than economists forecast last quarter, prompting investors to scrap bets on an interest-rate cut this quarter and driving up the nation’s currency to a record. The consumer price index rose 0.9% in the three months through June from the prior quarter. 

Also on interest rates, the Reserve Bank of India signaled it’s prepared to accept a slower expansion to pull down an inflation rate that risks causing a crash in the pace of growth in Asia’s third-largest economy if left unchecked. The RBI surprised markets yesterday when it increased its repurchase rate by 50 basis points to 8%. 

In corporate news, Japan Tobacco gained 5.4% to 335,000 yen, extending yesterday’s gains and the biggest support to the MSCI Asia Pacific Index. Japan’s Vice Finance Minister Fumihiko Igarashi said on July 25 the Japanese government is weighing selling assets including shares in Japan Tobacco to pay for earthquake reconstruction costs. Japan Tobacco plans to buy back some of the shares sold by the government. 

Catcher Technology jumped 6.8% to NT$265.50, the second-biggest increase on the MSCI Asia Pacific Index, and extending yesterday’s 6.9% jump. The company said second- quarter net income rose to NT$2.4 billion ($83.4 million) from NT$839.6 million in the same period a year earlier on July 25. Elsewhere, Mitsubishi UFJ Financial Group fell 0.7% to 403 yen while rival Sumitomo Mitsui Financial Group Inc. (8316) slipped 1.3%. Australia & New Zealand Banking Group Ltd. (ANZ), Australia’s third-largest lender by market value, dipped 0.7% to A$21.39.