No debt US deal hurts shares
City Index July 25, 2011 9:24 PM
<p>Stocks and oil declined across the Asian region for the first time in five days, while gold rallied to a record as U.S. President Barack […]</p>
Stocks and oil declined across the Asian region for the first time in five days, while gold rallied to a record as U.S. President Barack Obama and Congress failed to reach a deal on raising the debt limit, intensifying concern the nation could default.
The MSCI Asia Pacific Index fell 1.1% as of in afternoon Tokyo trade. Japan’s Nikkei 225 Stock Average fell 0.8%, retreating from its highest level since July 8, South Korea’s Kospi Index slumped 1.1%, and Australia’s S&P/ASX 200 Index slipped 1.5%.
The Shanghai Composite Index tumbled 2.1%, led by a plunge in railway shares after two high-speed trains collided in the eastern province of Zhejiang on July 23, killing at least 35 people and injuring 210. Secretary of State Hillary Clinton reassured China, the top holder of American treasuries, that the U.S. will resolve its impasse over the debt ceiling and improve the country’s long-term fiscal outlook.Clinton noted that balancing the global economic order will require changes from both the U.S. and in Asia. While the U.S. must save more and borrow less, she said, Asia must do more to foster domestic demand.
In other economic news, Singapore’s inflation accelerated to the fastest pace since January as food and housing costs increased, sustaining pressure on the central bank to allow the currency to appreciate and contain price gains. The consumer price index rose 5.2% last month from a year earlier, the Department of Statistics said in a statement today, mostly matching expectations.
In Australia, retail investment group Premier Investments (PMV) – whose shares fell 2.3% – announced more profit downgrades as a result of weak spending conditions. Premier also plans to close around 50 stores out of a total store base in excess of 800. The news doesn’t bode well for Australian shopping centre owners like Stockland (SGP) and Westfield Retail Trust (WRT). Stockland (SGP) plans to spend around $2.2bn through to the end of FY12 on its current commercial project pipeline.
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