Asian Shares Decline As U.S. Debt Ceiling Talks Fail

Asian stocks fell broadly on Wednesday as investors took a risk-off approach ahead of U.S. consumer price inflation data due later in the day that could influence the Federal Reserve’s policy decisions.

The dollar weakened after crucial talks aimed at resolving an impasse over the U.S. debt ceiling didn’t yield much progress.

Gold prices were little changed, while oil snapped a three-day rally after industry data showed a surprise build in U.S. crude and gasoline stockpiles.

Chinese markets tumbled as shares of Chinese state firms came under selling pressure after a recent rally.

The benchmark Shanghai Composite Index slumped 1.2 percent to 3,319.15, while Hong Kong’s Hang Seng Index dropped 0.5 percent to 19,762.20. Tencent Holdings rose half a percent after two days of losses.

Japanese shares fell from a 16-month high as investors reacted to mixed earnings updates. The Nikkei 225 Index closed 0.4 percent lower at 29,122.18, while the broader Topix slid 0.6 percent to end at 2,085.91.

Mitsubishi Corp. rallied 3.7 percent after announcing a share buyback.

Department store operator Marui Group soared 15.2 percent on posting strong earnings, while Mitsubishi Motors slumped 9.8 percent after forecasting a profit drop.

Nippon Steel plunged 8.7 percent after predicting a 47 percent decrease in net profit for the current business year to March 2024.

Seoul stocks declined amid U.S. debt default woes. The Kospi dropped 0.5 percent to 2,496.51 despite the unemployment rate easing in April.

Australian markets edged down slightly as the country saw its first budget surplus since 2008. The benchmark S&P/ASX 200 Index slipped 0.1 percent to 7,255.70, dragged down by financials and miners. The broader All Ordinaries Index finished marginally lower at 7,452.30.

Across the Tasman, New Zealand’s benchmark S&P/NZX 50 Index climbed 0.8 percent to 11,987.30.

U.S. stocks fell overnight amid the ongoing stalemate in Washington over raising the U.S. debt limit and ahead of key inflation data.

The Dow slipped 0.2 percent, the S&P 500 eased half a percent and the tech-heavy Nasdaq Composite shed 0.6 percent.

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