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Global Shares Dip on China; US Shutdown09/26 05:14

   Global shares mostly sank Tuesday over worries about a possible U.S. 
government shutdown and the troubled Chinese economy.

   TOKYO (AP) -- Global shares mostly sank Tuesday over worries about a 
possible U.S. government shutdown and the troubled Chinese economy.

   France's CAC 40 lost 0.7% in early trading to 7,076.82. Germany's DAX fell 
0.5% to 15,329.25. Britain's FTSE 100 edged up 0.2% to 7,638.01. U.S. shares 
were set to drift lower with Dow futures down 0.3% at 34,158.00. S&P 500 
futures lost 0.5% to 4,359.25.

   Japan's benchmark Nikkei 225 index slipped 1.1% to finish at 32,315.05. 
Australia's S&P/ASX 200 dipped 0.5% to 7,038.20. South Korea's Kospi dropped 
1.3% to 2,462.97. Hong Kong's Hang Seng shed 1.5% to 17,470.31, while the 
Shanghai Composite fell 0.4% to 3,102.27.

   Investors are watching for Chinese economic indicators being released later 
in the week.

   "The Chinese property woes are far from over, as the notorious developer 
Evergrande defaulted on its 4 billion yuan onshore bond repayment and delayed 
the restructuring meetings," said Tina Teng, market analyst at CMC Markets APAC 
& Canada.

   While the crisis is not shocking to those closely following China's property 
market, concerns are growing that Chia's housing sector is still deteriorating, 
raising risks of financial instability, said Stephen Innes, managing partner at 
SPI Asset Management.

   "It's important to acknowledge that tackling the housing issue is much more 
challenging in practice than in theory. This difficulty is why property 
developers are still struggling two years into the Evergrande debt crisis, and 
potential homebuyers are hesitant to enter the market," he added.

   Realization is also sinking in that the Federal Reserve will likely keep 
interest rates high well into next year. The Fed is trying to ensure high 
inflation gets back down to its target, and it said last week it will likely 
cut interest rates in 2024 by less than earlier expected. Its main interest 
rate is at its highest level since 2001.

   The growing understanding that rates will stay higher for longer has pushed 
yields in the bond market up to their highest levels in more than a decade. 
That in turn makes investors less willing to pay high prices for all kinds of 
investments, particularly those seen as the most expensive or making their 
owners wait the longest for big growth.

   In the near term, the U.S. government may be set for another shutdown amid 
more political squabbles on Capitol Hill. But Wall Street has managed its way 
through previous shutdowns, and "history shows that past ones haven't had much 
of an impact on the market," according to Chris Larkin, managing director of 
trading and investing at E-Trade from Morgan Stanley.

   In energy trading, benchmark U.S. crude slipped $1.09 to $88.59 a barrel. 
Brent crude, the international standard, fell $1.07 to $92.22 a barrel.

   In currency trading, the U.S. dollar rose to 148.93 Japanese yen from 148.84 
yen. The euro cost $1.0598, up from $1.0594.

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