Market update: Markets remain cautious as US budget impasse drags on – 04.10.2013

Source: Henderson Global Investors

Trading on Wall Street weakened on day three of the US government shutdown (S&P 500 and Dow Jones both -0.9%, Nasdaq -1.1%). Investors are still hoping that Congress will be able to avoid a US default by agreeing to raise the $17 trillion debt limit by 17 October. The Institute for Supply Management’s Non-Manufacturing Index showed that the sector has grown for the past 45 months with a reading of 54.4 in September, albeit at a slower rate than August’s 58.6. A reading of more than 50 indicates sector expansion. Initial weekly unemployment claims rose to 308,000 in the previous week, lower than the 315,000 expected by economists. But several other US economic releases have been cancelled, including the keenly watched monthly non farm payrolls release.

Japan’s central bank kept policy unchanged as business sentiment has improved and exports are rising. The Nikkei ended today’s session down 0.9%.

European stocks are mixed this morning (FTSE Eurofirst 300 and FTSE 100 both -0.1%) as the US budget impasse drags on. In Italy, the Senate will vote on the potential expulsion of centre-right leader Silvio Berlusconi from politics due to his conviction for tax fraud.