Equity markets in the Asia-Pacific region displayed a mixed performance at the start of the week, as investors weighed the potential impact of a looming U.S. government shutdown should lawmakers fail to secure a budget deal by midnight on September 30.
Japan’s Nikkei 225 shed 0.79%, while the broader Topix index slipped 1.54% following record highs achieved the previous Friday. In contrast, Hong Kong’s Hang Seng index rose 1.22%, while Shanghai Composite dropped 0.20%. South Korea’s Kospi gained 1.28%, and Australia’s S&P/ASX 200 edged up 0.74%.
Markets in the United States ended last week with a rally, bolstered by key inflation figures. The Dow Jones Industrial Average climbed 299.97 points, or 0.65%, closing at 46,247.29. The S&P 500 advanced 0.59% to finish at 6,643.70, and the Nasdaq Composite rose 0.44%, settling at 22,484.07. Despite Friday’s gains, which broke a three-day losing streak, the main indices closed the week in negative territory.
Negotiations in Washington remain at an impasse, with Congress yet to agree on a funding measure to prevent a shutdown. Republicans are calling for a temporary funding extension through November, while Democrats insist on reversing recent cuts to healthcare and Medicaid as a precondition for approving any resolution. The last significant government shutdown stretched for 35 days from late 2018 to early 2019, with the Congressional Budget Office estimating an $11 billion hit to GDP.
Energy markets saw volatility amid geopolitical tensions. Brent crude futures advanced $0.71, or 1.02%, to settle at $70.13 per barrel on Friday, while U.S. West Texas Intermediate (WTI) crude closed $0.74, or 1.14% higher at $65.72. However, in early Asian trading on Monday, Brent retreated $0.55 to $69.58 per barrel and WTI dropped $0.63 to $65.09.
Meanwhile, spot gold prices increased 0.8% to $3,777.79 per ounce on Friday. The precious metal has climbed about 2.5% over the past week.
