World stocks ebb as U.S. debt resolution awaited

Oct 14, 2013, 6:07 AM EDT

BANGKOK (AP) — World stock markets ebbed in holiday-thinned trade Monday as investors waited for a resolution to the U.S. budget deadlock.

With the Oct. 17 deadline to increase the U.S. debt ceiling looming, Republican leaders have said they would vote to extend the government's borrowing authority for six weeks while a spokesman for President Barack Obama said he would "likely" sign a bill to increase the nation's ability to borrow money. But negotiations over the weekend did not reach a conclusion.

An agreement could also end the partial government shutdown that has idled about 350,000 Federal workers without pay for nearly two weeks.

Trading was muted in Asia, with markets in Tokyo and Hong Kong closed for holidays.

Outside of those major financial centers, China's Shanghai Composite Index rose 0.4 percent to 2,237.77 while South Korea's Kospi was off 0.2 percent at 2,020.27. Australia's S&P/ASX 200 shed 0.4 percent to 5,207.90. Markets in Taiwan and Southeast Asia were also down.

In early European trading, France's CAC-40 fell 0.2 percent to 4,208.96 and Germany's DAX lost 0.3 percent to 8,702.26. Britain's FTSE 100 was little changed at 6,489.81.

Wall Street rose for a second day Friday as investors bet lawmakers would reach agreement to raise the debt limit and prevent the U.S. from defaulting on its debt payments, a possibly that has upset markets since mid-September. U.S. government bonds are usually considered the world's safest investment, so even the possibility of a default is unnerving for investors.

But futures augured losses for U.S. shares on Monday. Dow futures were down 0.6 percent at 15,083 and S&P 500 futures retreated 0.7 percent to 1,687.80.

In energy markets, benchmark crude for November delivery was up 42 cents at $102.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 99 cents to close at $102.02 on Friday.

The euro rose to $1.3563 from $1.3555 late Friday in New York. The dollar rose to 98.31 yen from 98.19 yen.