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US stocks fell sharply on Thursday, with the Nasdaq Composite briefly touching bear market territory, as the threat of a US government shutdown pushed volatility to its highest level since February.

President Donald Trump said he would veto a bill to fund the government unless it had money for a Mexico border wall, raising the odds of a partial shutdown that would furlough public employees and could potentially crimp the US economy. 

That added a new item to a long list of investor worries, including clouds over the global economy and the Federal Reserve’s signal that it would probably keep raising US interest rates even though it sees a less rosy picture of the economy next year. 

Across global markets on Thursday stocks, oil prices and the dollar were under renewed pressure and the Treasury yield curve flattened. The S&P 500 and the Nasdaq fell 1.6 per cent, oil was off 5.1 per cent on the day to close at $54.35 while the dollar slipped to its lowest intraday level since November 20. Ahead of markets opening in Asia Hang Seng futures were flat while Topix futures were up 0.3 per cent.

The economic calendar for Friday doesn’t look set to offer traders much in the way of Christmas cheer (all times Hong Kong):

  • 07.30: Japan consumer price index 
  • 11.00: Thailand trade data 
  • Hong Kong current account, South Korea producer price index and Macau visitor arrival data are also slated for release.

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