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BUSINESS

Asia stocks muted on US government shutdown

Asian stock markets Thursday withstood some of the gloom seeping into other financial markets as the partial shutdown of the U.S. government dragged on for a third day.

Nonessential public services across the U.S. ground to a halt after Congress failed to approve short-term funding for the government after the fiscal year ended Monday. Some 800,000 federal workers have been put on unpaid leave and agencies across the U.S. have been idled.

Japan's Nikkei 225 index fell 0.1 percent to 14,153.75. Hong Kong's Hang Seng rose 0.8 percent to 23,177.19. Australia's S&P/ASX 200 added 0.7 percent to 5,250.50. Markets in mainland China and South Korea were closed for public holidays.

European Central Bank head Mario Draghi said that the partial U.S. government shutdown was a risk to economic recoveries in the U.S. and globally. Estimates suggest that a shutdown of two weeks could shave 0.3 percentage points off U.S. fourth quarter growth, according to analysts at Credit Agricole CIB in Hong Kong.

"Moreover, the shutdown may interrupt some economic data releases," Credit Agricole's Michael Carey wrote in an email commentary.

The Labor Department will likely have to delay the release of its employment data for September, scheduled for Friday, "as they have reported that they will not collect data, issue reports, or respond to public inquiries during the shutdown," Carey said.

After shrugging off the first day of the shutdown Tuesday, Wall Street made it clear on the second day that it was becoming more and more nervous that the budget fight could turn into something worse: a failure to raise the nation's borrowing limit.

The government will run out of money to pay its bills by Oct. 17. Congress must periodically raise the limit on government borrowing, but the once-routine matter has become the subject of bitter fights as Democrats and Republicans argue over how to reduce the country's swelling budget deficit.

But failure to raise the government's borrowing limit is seen by financial markets as a disastrous move that could send the U.S. into recession.

The Dow Jones industrial average fell 0.4 percent to close at 15,133.14. The Standard & Poor's 500 dropped 0.1 percent to 1,693.87. The Nasdaq composite declined 0.1 percent, to 3,815.02.

Benchmark oil for November delivery was down 41 cents to $103.69 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $2.06, or 2 percent, to close at $104.10 a barrel on the Nymex on Wednesday.

In currencies, the euro rose to $1.3612 from $1.3583 late Wednesday. The dollar rose to 97.57 yen from 97.36 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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