HONG KONG: Asian markets struggled to maintain early momentum on Tuesday (Nov 11) as a rally fuelled by hopes for an end to the US government shutdown ran out of gas.
Equities started the week on the front foot after US lawmakers reached a deal to reopen the government after more than 40 days, adding to a revival of demand for tech giants despite growing fears of an AI-fuelled bubble.
Senators on Capitol Hill passed the compromise budget measure on Monday night after a group of Democrats broke with their party to side with Republicans on a Bill to fund departments through January.
It is hoped the Bill will then pass the Republican-held House of Representatives and head to Donald Trump’s desk, with some suggesting the government could reopen Friday.
“It appears to us this morning that our long national nightmare is finally coming to an end, and we’re grateful for that,” House Speaker Mike Johnson told reporters Monday.
And the US president told reporters in the Oval Office that “we’ll be opening up our country very quickly”, adding that “the deal is very good”.
Investors have welcomed the developments, having grown increasingly concerned about the impact of severe disruptions of food benefits to low-income households, and of air travel heading into the Thanksgiving holiday.
It has also meant key official data on a range of things, including inflation and jobs, has not been released, leaving traders to focus on private reports for an idea about the economy.
The lack of crucial data has also meant the Federal Reserve has been unable to gauge properly whether or not to cut interest rates at its next meeting in December, keeping investors guessing.
Asian markets started on Tuesday by extending Monday’s gains as well as a rally on Wall Street, but struggled to maintain momentum going into the afternoon.
Tokyo, Sydney, Shanghai, Taipei, Manila, Bangkok and Wellington all fell, while Seoul gave up its initial strong gains to sit slightly higher, along with Hong Kong, Mumbai and Singapore.
https://www.channelnewsasia.com/asia/asia-stocks-us-shutdown-nears-end-5459491
