Asian markets open as debt talks remain stalled
vibram five fingers kso Asian financial markets slid in early trading Monday as investors watched closely to see whether the impasse in U.S. debt negotiations will prompt a dramatic sell-off on global exchanges.

Japan’s Nikkei 225 index, which includes major Japanese companies, was down about 0.63 percent in early trading Monday. The Standard & Poor’s 500 /ASX 200 index, a measure of Australia’s blue-chip stocks, was down about 0.86 percent. South Korea’s benchmark KOSPI index was down about 0.7 percent.

vibram five fingers bikila Hong Kong’s Hang Seng index slid about 0.63 percent in early trading, while Shanghai’s Stock Exchange Composite index was down about 0.73 percent.

Talks between President Obama and House Speaker John A. Boehner (R-Ohio) broke down Friday evening and efforts to restart the negotiations in time for the opening of Asian markets did not make progress.

The absence of a bipartisan plan for raising the U.S. debt ceiling, and thus avoiding a potential default on Aug. 2, is fueling concerns in global markets because of the crucial role that U.S. Treasury bonds play in all manner of financial transactions. Some analysts expected investors in Asian markets to price some of that concern into stock values.

vibram five fingers speed “Global markets are going to get more and more jittery the longer we go,” said John Peters, senior economist at the Commonwealth Bank of Australia. “Our economy is actually growing quite strongly at the moment,” he added, “but all bets are off when there’s something big looming on the global horizon.”

But Japanese investors have more reason to be worried about the ongoing stalemate in Washington because the Japanese economy is still recovering from March’s earthquake and tsunami.

five fingers kso “I think the stability of the financial market is a precondition for the Japanese economy to recover,” said Katsuyuki Hasegawa, chief market economist with the Mizuho Research Institute in Tokyo. “That pre-condition is now being threatened by the development in the States.”

In addition to watching the Tokyo and Sydney exchanges, investors and policymakers are eager to see how trading fares on the exchanges in Hong Kong and Shanghai, which are to open shortly.

There were signs late Sunday that markets in the United States would open lower Monday morning.

five fingers flow Futures contracts for the Dow Jones industrial average, the Standard & Poor’s 500 and the Nasdaq, the three major U.S. stock indexes, were trading lower Sunday night, off by about 1 percent or less.

Asian markets generally fared well last week, with major stock indexes in Australia, Japan and Hong Kong edging up between 2 to 3 percent. China’s Shanghai stock index edged lower by 1.75 percent.

A slide in Asian markets Monday could spread to the United States since global equity markets are more tightly linked than they once were.

five fingers sprint Until now, markets have brushed off Washington’s continued struggle to resolve the debt-limit issue and reach agreement on a plan to tame the deficit. But the prospect of default is now less than nine days away.

Investors had found some solace in the assurances from Democratic and Republican leaders that Congress would eventually lift the $14.3 trillion U.S. borrowing limit and avoid default.

five fingers classic But that claim will be put to the test. The Treasury is set to auction off $99 billion in new debt this week, and demand for the sales could provide the first real indication of whether international markets believe default will be avoided, said Huw McKay, senior international economist with Westpac Institutional Bank in Sydney.

“I think that is what is going to tell the tale,” he said.

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