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Asia stocks down as US faces likely budget battle

(AP) Asia stocks down as US faces likely budget battle
By PAMELA SAMPSON
AP Business Writer
BANGKOK
Jitters about the U.S. economy and the potential for a budget showdown in Washington sent Asia stock markets lower Tuesday.

Investors initially celebrated a decision by the U.S. Federal Reserve to maintain its huge stimulus, but the enthusiasm has worn off as the reasoning behind the decision _ that the U.S. economy is weak _ has begun to sink in. The approaching budget battle between the White House and Republican lawmakers also threw an element of uncertainty at markets.

Rallies across the globe, including record highs on Wall Street, have left markets struggling to find a reason to head higher, said Evan Lucas, market strategist at IG in Melbourne, Australia.

"The run has been well supported and the more steam it has gathered the more it has sucked in funds from underperforming sources such as money markets and bond markets," he said in an email commentary.

Japan's Nikkei 225 fell 0.7 percent to 14,641.34. Hong Kong's Hang Seng dropped 0.6 percent to 23,236.45. Australia's S&P/ASX 200 shed 0.4 percent to 5,230.30. South Korea's Kospi fell 0.6 percent to 1,998.41.

Benchmarks in mainland China, the Philippines and Indonesia fell. Singapore and New Zealand were marginally higher.

The debt ceiling, which is the limit on the government's borrowing, must be raised by Oct. 1 to avoid a shutdown. Republicans are demanding that any increase must result in expenditure cuts of an equal amount. President Barack Obama is demanding a debt limit increase with no conditions attached.

The Dow Jones industrial average fell 0.3 percent to close at 15,401.38. The Standard & Poor's 500 fell 0.5 percent to 1,701.84. The Nasdaq composite fell 0.3 percent, to 3,765.29.

Benchmark oil for November delivery was down 21 cents to $103.38 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.16 to close at $103.59 a barrel on the Nymex on Monday.

In currencies, the euro fell to $1.3493 from $1.3493 late Monday. The dollar fell to 98.74 yen from 98.78 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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