Asian shares were little changed on Wednesday, with prices capped by continuing concerns over whether the United States can avert an economic slump as lawmakers struggle to break a budget impasse by year end.
Investors will look at a private survey of China’s growing services sector due around 0145 GMT on Wednesday for more signs the world’s second-largest economy is recovering from lows.
MSCI’s broadest index of Asia-Pacific shares outside Japan was nearly flat, with a 0.4 percent gain in Australian shares and a 0.1 percent drop in South Korean shares. Japan’s Nikkei stock average opened down 0.6 percent.
“The market lacks news that could add to the momentum seen in late November. Investors’ focus will remain on whether U.S. politicians will unravel the fiscal cliff problem,” said Kim Hyeong-ryeol, an analyst at Kyobo Securities.
U.S. stocks slipped on Tuesday as investors worried about
Washington’s ability to avoid a year-end budget crisis, which threatens to push the economy back into recession, but a Greek plan to buy back debt pushed the euro to a seven-week high of $1.3109 on Tuesday.
The pan-European FTSEurofirst 300 closed flat, off a 17-month intra-day high, possibly pausing before a renewed challenge on technical resistance levels into the year-end.
Commodities struggled as weak U.S. manufacturing data and uncertain U.S. budget talks raised further concerns about the world economy.
The White House and Republicans remain at odds on how to avoid a $600 billion “fiscal cliff” of budget cuts and tax increases set to take effect on Dec. 31.
President Barack Obama dangled the possibility on Tuesday of lowering tax rates in 2013 with a broad U.S. tax code revamp, but stood firm on insisting rates for the wealthiest must rise as part of a budget deal with Congress.
“He was relatively conciliatory, proposing a two stage approach of a short-term gain for both sides, then deal with the bulk of the problem in 2013,” Sebastien Galy, currency strategist at Societe Generale, said in a note to clients.
