ASIA MARKETS: Asia Shares Fall; Japan's Nikkei Dips Below 14,000

By Mia Lamar

Asian shares traded lower on Friday giving way to rising political uncertainties in the U.S. and putting Japan's benchmark Nikkei briefly below the 14,000 mark for the first time in nearly a month.

A partial government shutdown in the U.S. dragged on for the third day Thursday as lawmakers remained at an impasse over funding for the country's budget. The standoff comes just weeks before a crucial deadline to raise the nation's borrowing limit -- a measure which also must be approved by lawmakers.

"Creeping worries about the U.S. debt ceiling are starting to unnerve investors," said Mike Jones, a currency strategist at the Bank of New Zealand in Wellington.

Asian markets have been mostly resilient in the wake of the shutdown. Australia's S&P/ASX 200 , down 0.3% Friday, has closed higher in each session since the U.S. government shuttered on Tuesday. Hong Kong's Hang Seng Index , down 0.5% Friday, had gained nearly 2% since reopening from the National Day holiday Tuesday.

Gold prices remained at odds with the asset's traditional safe-haven status on Friday. Spot gold prices slipped to $1,316.10 an ounce in Asian trading.

"This uncertainty should have been good for gold and yet it has failed to rally," said Kelly Teoh, market strategist at IG in Singapore. The performance "suggests investors don't expect this shutdown to go on for an extended period of time."

A 2.4% decline in China Mobile Ltd. shares, which carry the second-largest weighting on the Hang Seng Index, accounted for nearly a third of the index's loss. Reports in mainland news media on Thursday suggested China's telecom regulator may cut by half interconnection fees other carriers pay to China Mobile, the country's largest wireless carrier.

Japan's Nikkei was down 0.4% in afternoon trade in Tokyo, recovering from a brief dip below the 14,000 mark earlier in the session. The U.S. dollar wavered between gains and losses, last changing hands at Yen97.24 compared with Yen97.12 late Thursday in New York.

Shares of electronics manufacturers Panasonic Corp. and Sharp Corp. each traded roughly 3% lower as the yen fluctuated between strength and weakness. A stronger yen increases price competition with overseas rivals.

Elsewhere in Asia, Singapore's Straits Times Index was flat and South Korea's Kospi fell 0.5%.

U.S. stocks fell across the board on Thursday. The Dow Jones Industrial Average (DJI) closed down 0.9% at 14,996 and the S&P 500 index (SPX) fell 0.9% to 1,679.

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