The Straits Times
Published on Dec 21, 2012

DUPLICATED FILED, DO NOT PUBLISH: Asian markets retreat as US fiscal cliff fears grow


HONG KONG (AP) - Heightened uncertainty about the outcome of budget negotiations in Washington among President Barack Obama, House Speaker John Boehner and other Republican lawmakers drove Asian stock markets lower Friday.

If a compromise is not in place by Jan 1, the Bush-era tax cuts will expire and spending cuts will kick in automatically - a one-two punch to the economy that many experts fear will push the United States economy back into recession just as it begins to recover from the last one.

Japan's Nikkei 225 index fell nearly 0.8 per cent to 9,964.53. Hong Kong's Hang Seng lost 0.8 per cent to 22,483.20. South Korea's Kospi shed 0.9 per cent at 1,982.49. Australia's S&P/ASX 200 fell 0.3 per cent to 4,618.60. Benchmarks in Singapore, Indonesia, Thailand and Taiwan also fell. Malaysia and the Philippines rose.

US stock futures tumbled after rank-and-file Republican lawmakers failed to support an alternative tax plan by Mr Boehner late on Thursday in Washington. That plan would have allowed tax rates to rise on households earning US$1 million (S$1.2 million) and up. Mr Obama wants the level to be US$400,000.