Asian Stocks Swing Between Gains, Losses on U.S. Impasse

Asian stocks swung between gains and losses as U.S. lawmakers resumed talks to avoid a default ahead of tomorrow's deadline to raise the debt ceiling.

Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., fell 0.9 percent in Hong Kong. Japan Tobacco Inc., Asia's largest listed cigarette maker, dropped 3.1 percent on a report it may raise prices after an increase in the nation's sales tax. GungHo Online Entertainment Inc. jumped 17 percent in Tokyo after the game developer and its parent SoftBank Corp. agreed to buy 51 percent of Finland's Supercell Oy.

The MSCI Asia Pacific Index was little changed at 141.36 as of 11:23 a.m. in Tokyo, after swing between gains and losses of 0.2 percent. About four shares dropped for every three that fell on the gauge, which is trading near a five-month high. Senate leaders have restarted negotiations to find a solution that would reopen the government and prevent default, according to an e-mailed statement from a spokesman of Republican Senator Mitch McConnell.

"The leaders in the Senate are optimistic and that's keeping the markets supported." Chris Weston, chief market strategist at brokerage IG Ltd. in Melbourne, said by phone. "It's all very confusing and extremely frustrating. There's not a lot of clarity now, so people are probably going to stay on the sidelines until we get something more meaty on the bone.

McConnell and Senate Majority Leader Harry Reid ''are optimistic that an agreement is within reach," a spokesman for Reid said in a statement. Earlier today, they had suspended their talks, while House of Representatives postponed a potential vote on a plan to reopen the government and increase the debt ceiling minus Republican conditions.

Regional Gauges

Hong Kong's Hang Seng Index slipped 0.3 percent, while China's Shanghai Composite Index dropped 1.3 percent. Japan's Topix (TPX) fell 0.1 percent and Taiwan's Taiex index lost 0.2 percent.

South Korea's Kospi index was little changed after a report showed the nation's unemployment rate unexpectedly fell to 3 percent in September from 3.1 percent a month earlier.

Australia's S&P/ASX 200 Index was little changed, while New Zealand's NZX 50 Index added 0.3 percent. Singapore's Straits Times Index gained 0.4 percent. Indian markets are closed for a holiday.

The MSCI Asia Pacific Index climbed 1.3 percent last week amid optimism U.S. lawmakers were moving closer to resolving the debt impasse. The gauge traded at 13.6 times estimated earnings yesterday, compared with 15.3 for the Standard & Poor's 500 Index and 14.4 for the Stoxx Europe 600 Index.

U.S. Futures

S&P 500 futures advanced 0.6 percent today. The U.S. equity gauge slipped 0.7 percent yesterday as the absence of deal to raise the $16.7 trillion U.S. debt limit spurred a surge in Treasury bill rates. With the U.S. borrowing authority set to lapse tomorrow, Fitch Ratings put the world's biggest economy on watch for a possible credit downgrade, citing lawmakers' inability to forge a deal.

House Speaker John Boehner, a Republican, was making a last-minute attempt to influence the outcome of the fiscal showdown with a proposal that would extend government funding through Dec. 15, compared with the Jan. 15 threshold included in the Senate's plan.