Asian shares slip as US debt deadline looms

Asian stocks fell Friday as traders grew nervous that US lawmakers were still deadlocked on a deal to avert a default by the world's richest country. With the clock ticking on the August 2 deadline, when the Treasury says it will run out of cash, global markets are looking to Washington, where the White House, Democrats and Republicans have failed to agree a deficit-cutting plan. Tokyo was flat by the break, as data showing an improvement in industrial production was outweighed by disappointing earnings results, including from Nintendo, which suffered a huge sell-off. Hong Kong fell 1.03 percent, Sydney lost 0.60 percent and Shanghai dipped 0.12 percent while Seoul was 0.22 percent lower and Taipei shed 0.77 percent. Politicians on Capitol Hill have been unable to reach a compromise deal that would allow the government to raise the debt ceiling above its current $14.3 trillion. Most experts agree that a default by the United States could send seismic ripples through the global economy and lead to another downturn like that of 2008. And with just days before the tank runs dry Republican leaders were forced to put off a vote on their own reduction plan as they struggled to rein in some party members, many of whom are opposed to any hike in the debt ceiling at all. However, there is confidence the deadlock will be broken, with the White House saying it is confident "sanity will prevail in the United States Congress and they will reach a compromise". The impasse hit Wall Street, with the Dow losing 0.51 percent, the S&P 500 down 0.32 percent and the Nasdaq flat. In Tokyo traders were given a lift by data showing industrial production rose for the third straight month in June as companies revive output amid an ongoing recovery of supply chains after the March 11 quake-tsunami. Japan's output rose 3.9 percent in June from the previous month. However, Nintendo was hammered, losing more than 20 percent after it posted a first-quarter loss, cut forecasts and slashed the price of its 3DS handheld console less than six months after its launch. Sony shed 1.9 percent after saying Thursday it swung to a net loss in the fiscal first quarter and lowered its full-year earnings forecast. On currency markets the euro bought $1.4353 in early Tokyo trade, up from $1.4324 late Thursday in New York. It fetched 111.42 yen, up from 111.37. The dollar traded at 77.57 yen, compared with 77.74 in New York. New York's main contract, light sweet crude for delivery in September, fell 22 cents to $97.22 per barrel. Brent North Sea crude for September shed four cents to $117.32. Gold opened in Hong Kong at $1,615.00-$1,616.00 an ounce, down from Wednesday's finish of $1,618.00-$1,619.00.