Asia stocks dip on U.S. fiscal cliff woes; Nikkei down 0.85%

Investing.com - Asian stocks dropped on Wednesday on fears the U.S. fiscal cliff is fast approaching with little evidence that lawmakers are making progress to prevent taxes from rising at the same time deep spending cuts kick in.

Solid U.S. data cushioned losses.

During Asian trading on Wednesday, Hong Kong's Hang Seng Index was down 0.83%, Australia's S&P/ASX200 was down 0.40%, while Japan’s Nikkei 225 Index was down 0.85%.

Stock prices dropped on fears U.S. policymakers are running out of time to steer the country away from the fiscal cliff, a combination of tax hikes and spending cuts due to take effect at the same time at the end of this year.

The nonpartisan Congressional Budget Office has said failure to deal with the fiscal cliff could send the economy contracting by 0.5% in 2013 if lawmakers leave the matter unchecked.

Safe-haven currencies gained and stocks fell as investors lost appetite for risk when U.S. Senate Majority Leader Harry Reid, a Democrat allied with President Barack Obama, said he was disappointed over the progress of fiscal reforms talks with his Republican counterparts.

Democrats and Republicans remain at odds over tax hikes, with the former clamoring for the Bush-era tax breaks to expire for the wealthy to drum up fresh government revenue, and the latter countering that such a move would hit small businesses and force them to put off investing and adding payrolls.

Spending cuts have drawn contrasting points of view as well.

Solid data out of the U.S., a key Asian export market, kept losses at bay.

U.S. consumer confidence rose to its highest level since February 2008 in November, industry data showed on Thursday.

The Conference Board, a market research group, reported earlier that its index of consumer confidence rose to 73.7 in November from a reading of 73.1 in October, whose figure was revised up from 72.2.

Analysts had expected the index to decline to 73.0 in November.

Elsewhere, the U.S. Census Bureau reported that core durable goods orders, which exclude volatile transportation items, rose by a seasonally adjusted 1.5% in October, far outpacing market calls for a 0.5% decline.

The report also showed that total orders for durable goods were unchanged last month compared to expectations for a 0.6% decline.

Separately, the Standard & Poor's/Case-Shiller home price index rose at an annualized rate of 3.0% in September from a year earlier, beating expectations for a 2.9% increase.

In Hong Kong, top decliners included China Shenhua, down 2.50%, Henderson Land, down 2.12%, and CNOOC, down 2.01%.

In Australia, top decliners included NRW Holdings, down 16.67%, Intrepid Mines, down 10.45%, and Panoramic Resources, down 7.76%.

European stock futures indicated a lower opening.

France's CAC 40 futures pointed to a loss of 0.03%, while Germany's DAX 30 futures pointed to a loss of 0.03%. Meanwhile in the U.K., FTSE 100 futures were down 0.06%.

Dow Jones Industrial Average futures were down 0.12%, while the S&P 500 futures were down 0.19%.