Japanese and Chinese stocks slip ahead of debt ceiling vote
Japanese and Chinese equities declined on Tuesday while those in Hong Kong and South Korea advanced ahead of a vote in the US on whether to approve a deal to raise the country’s debt ceiling.
The Topix fell 0.7 per cent in morning trading while the CSI 300 slipped 0.2 per cent. The Kospi and the Hang Seng index gained 0.9 per cent and 0.1 per cent, respectively.
Investors are looking ahead to a US House vote on a deal to raise the country’s debt limit in time to avert a default on US debt, a prospect that has rattled markets in recent weeks.
What to watch in Asia today
New Development Bank: The Shanghai-based lender also known as the “Brics bank” will begin its annual meeting. The bank is in talks with Saudi Arabia on admitting the country as its ninth member. The move that would strengthen its funding options as founding shareholder Russia struggles under the impact of sanctions.
Markets: Stocks declined in Japan but rose in South Korea and Australia, while futures contracts pointed to losses in Hong Kong. Investors will continue to focus on the prospect of the US raising its debt ceiling, which will be put to a vote in Congress on Wednesday.
Oil rises on debt ceiling optimism
Oil prices rose on Monday evening, buoyed by optimism over the agreement of a deal to raise the US debt ceiling and avert default in the world’s largest economy.
The US benchmark West Texas Intermediate gained 0.5 per cent to reach $73.03 per barrel.
Republican leaders and the White House have secured the backing of crucial mainstream lawmakers for their deal to avert a damaging default on US debt, concerns over which had dented sentiment across markets in recent weeks. President Joe Biden told reporters on Monday that he felt “very good” about the deal’s prospects in Congress.
China turns down US invitation for defence chiefs meeting in Singapore
Beijing has declined the Pentagon’s request for a meeting between US defence secretary Lloyd Austin and China’s defence minister Li Shangfu at a security forum in Singapore in June, the latest sign of the difficulties the countries are having trying to stabilise their turbulent relationship.
The overture had been made for a meeting to take place at the Shangri-La Dialogue, an Asia security event hosted annually by the International Institute for Strategic Studies. “The People’s Republic of China informed the US that they have declined our early May invitation,” the Pentagon said.
Read more about the rejected meeting here.
Kosovo erupts in violence as ethnic Serbs bar Albanian mayors from taking office
Kosovo erupted in the year’s worst clashes between ethnic Serbs and Albanians on Monday as tensions escalated over a disputed election last month, leading to dozens of casualties among mostly Serb protesters and injuries to about 25 Nato peacekeepers.
The violence broke out as Serb demonstrators tried to block newly elected ethnic Albanian mayors from taking office after widely boycotted elections last month in Kosovo’s contested north. The clashes raised fears of a deepening conflict with the potential to spread through the region just as the two sides had come close to a co-operation deal.
Read more about Kosovo here.
