Asian stocks down as US talks stall

Asian stocks closed lower today (December 31st) on the last trading day of 2012 as policymakers in the US remained unable to come to a conclusion on the so-called fiscal cliff.

Concerns that tax increases and spending cuts that will automatically come into force in the new year if an agreement is not reached has resulted in haven buying in dollar and yen assets, while gold climbed on commodities markets.

However, an end to the talks is becoming increasingly unlikely as just one day before the deadline, lawmakers are still taking part in negotiations.

Hong Kong's Hang Seng index closed low at 22,656.92, while London's FTSE 100 was down 0.4 per cent at 5900.18 in early trade.

Germany's markets were closed for new year and several others were only trading until midday.

The Japanese yen has been on a steady decline since last month, dropping around eight per cent since officials called an election and investors started looking for a change in administration.

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