Most Asian stocks traded lower Tuesday as risk appetite was scant following a third consecutive days of losses for U.S. equities.
In Asian trading Tuesday, Japan's Nikkei 225 fell 0.57% as USD/JPY traded slightly lower. Japanese markets were closed Monday for a public holiday. Financial services and industrial firms were among the losers in Asia with exporters among the biggest losers in Japan.
Hong Kong's Hang Seng dropped 0.96% while the Shanghai Composite lost 0.97%. Traders backed away from riskier assets amid speculation that the U.S. is heading for another tough political fight this year with the debate over raising the country's debt ceiling looming.
Usually not a contentious issue, raising the debt ceiling became just that last year as the U.S. narrowly averted another credit downgrade and possible default on its sovereign bonds.
Australia's S&P/ASX 200 fell 0.6% due to ongoing uncertainty regarding the near-term future of Federal Reserve tapering. Last Friday by St. Louis Fed President James Bullard who said Friday the decision not to taper in September was "close" and indicated that there could be a small reduction in bond purchases in October.
However, on Monday, Federal Reserve Bank of New York President William Dudley said the Fed will hold back on tapering until the U.S. economic recovery proves sustainable.
New Zealand's NZSE 50 was one of the regional bright spots Monday as it gained 0.28%. Market participants have reduced expectations that the Reserve Bank of New Zealand will raise interest rates early next year, but the odds remain high.
South Korea's Kospi dropped 0.65% while Singapore's Straits Times Index lost 0.15%. S&P 500 futures fell 0.15% a day after the benchmark U.S. index lost 0.18%.