This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-15830885
The article has changed 4 times. There is an RSS feed of changes available.
Version 2 | Version 3 |
---|---|
Asian shares flat after US debt reduction talks fail | |
(40 minutes later) | |
Most Asian shares have stabilised after early falls on news that a special committee failed to agree a deal to reduce US debt levels. | Most Asian shares have stabilised after early falls on news that a special committee failed to agree a deal to reduce US debt levels. |
Japan's main index fell 1% and Australia's slipped 1.3% when markets opened. | Japan's main index fell 1% and Australia's slipped 1.3% when markets opened. |
But by the close of trade, most Asian exchanges had shrugged off previous worries. | |
Japan's benchmark Nikkei index was down by just 0.40%, whilst Hong Kong's Hang Seng was 0.14% higher. | |
US stock indexes had lost about 2% on Monday after reports emerged that a so-called debt "super-committee" was not able to reach agreement. | US stock indexes had lost about 2% on Monday after reports emerged that a so-called debt "super-committee" was not able to reach agreement. |
Debt worries in the US, as well as the continuing problems in Europe, have been weighing on Asian markets. | Debt worries in the US, as well as the continuing problems in Europe, have been weighing on Asian markets. |
The US committee, made up of Republicans and Democrats, was tasked with cutting the country's budget deficit by $1.2tn (£762bn). | The US committee, made up of Republicans and Democrats, was tasked with cutting the country's budget deficit by $1.2tn (£762bn). |
US debt has now climbed above $15tn. | US debt has now climbed above $15tn. |
Ratings agencies stopped short of downgrading US debt despite the fact that a deal was not reached. | Ratings agencies stopped short of downgrading US debt despite the fact that a deal was not reached. |
Standard and Poor's, which downgraded the US from its top AAA grade rating on 5 August, said the failure to reach an agreement did not merit another downgrade. | Standard and Poor's, which downgraded the US from its top AAA grade rating on 5 August, said the failure to reach an agreement did not merit another downgrade. |
Spending cuts | Spending cuts |
Monday's breakdown in talks triggers $1.2tn in automatic spending cuts that will go into effect in 2013. | Monday's breakdown in talks triggers $1.2tn in automatic spending cuts that will go into effect in 2013. |
"Ultimately, spending cuts will come in and that will help to rein in the fiscal deficit hopefully," Thio Chin Loo of BNP Paribas told the BBC's Asia Business Report. | "Ultimately, spending cuts will come in and that will help to rein in the fiscal deficit hopefully," Thio Chin Loo of BNP Paribas told the BBC's Asia Business Report. |
Loo added that the view that spending cuts would happen regardless of the committee's decision helped explain Monday's muted market reaction. | Loo added that the view that spending cuts would happen regardless of the committee's decision helped explain Monday's muted market reaction. |
However, analysts agree that there is also a sentiment amongst investors that politicians are too divided to deal with debt issues in the US and they will persist. | However, analysts agree that there is also a sentiment amongst investors that politicians are too divided to deal with debt issues in the US and they will persist. |
It also comes at a time when the eurozone debt crisis threatens to spillover into larger economies, causing more problems for global growth. | It also comes at a time when the eurozone debt crisis threatens to spillover into larger economies, causing more problems for global growth. |
Yields on Spanish, French, Italian and Belgian government bonds rose after the rating agency Moody's warned that France's AAA credit rating was in jeopardy. | Yields on Spanish, French, Italian and Belgian government bonds rose after the rating agency Moody's warned that France's AAA credit rating was in jeopardy. |