Asian markets drop as fiscal cliff fears mount.
Asian markets drop as fiscal cliff fears mount.

Asian markets fell in the morning session as fiscal cliff uncertainty deepened after Republicans called off the proposed vote on a backup plan to avert the crisis citing lack of support.

Japan's Nikkei average slipped 0.25 percent or 25.16 points to 10014.17 while South Korea's KOSPI fell 0.85 percent or 16.91 points to 1982.59. China's Shanghai Composite Index eased 0.10 percent or 2.19 points to 2166.17. Hong Kong's Hang Seng dropped 0.69 percent or 157.16 points to 22502.62.

The Wall Street had closed with modest gains overnight as traders remained optimistic on the budget talks. But sentiments dipped after House Republican leaders abandoned a vote on a "Plan B", to raise tax on those earning more than $1mn as they failed to muster required numbers to win it.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," House Speaker John Boehner said in a statement.

"Now it is up to the president to work with Senator (Harry) Reid on legislation to avert the fiscal cliff."

Republicans' failure to gain backing among its own members has increased concerns on the direction of negotiations as the year-end deadline looms.

Japanese stocks continued to trade lower as the Yen picked up from its recent weak run against the Dollar. But financial firms extended gains following the Bank of Japan's recent step to boost its asset purchase plan by 10 tn Yen.

Major Movers

Exporter firms were down on the Yen's weakness. Pioneer was down 4 percent while Casio Computer Company fell 3.40 percent. Shares of Sharp slid 2.65 percent.

Automobile major Mitsubishi Motors extended losses, dropping 5.81 percent after the company recalled 1.2 million cars in Japan due to faulty oil seals.

Financial firms traded lower in Hong Kong. Shares of Industrial Commercial Bank of China were down 1.79 percent while those of China Construction Bank fell 1.44 percent. Bank of Communications slipped 1.03 percent.

Some of the major pharmaceutical companies fell in Seoul. Wooridul Life Sciences dropped 14.80 percent. Wooridul Pharmaceutical was down 14.65 percent.

Pharmaceutical stocks traded lower in China as well. Shares of Star Lake Bioscience Company dropped 5.07 percent while those of Kangmei Pharmaceutical Company were down 5.72.