Global shares mostly decline as markets brace for a possible US government shutdown

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TOKYO (AP) — Global shares were mostly lower in narrow trading Tuesday as investors braced for a possible U.S. government shutdown.

France's CAC 40 dipped 0.5% in early trading to 7,845.73. Germany's DAX lost 0.1% to 23,718.17. Britain's FTSE 100 lost 0.2% to 9,282.13. U.S. shares were set to drift lower with Dow futures down 0.2% at 46,518.00. S&P 500 futures fell 0.2% to 6,703.75.

In Asia, Japan's benchmark Nikkei 225 declined nearly 0.3% to finish at 44,932.63.

China reported lackluster data on factory activity for September that reflect persistent weakness in the world's second largest economy as trade tensions with the U.S. weigh on exports.

Hong Kong’s Hang Seng gained 0.9% to 26,855.56. The Shanghai Composite index added 0.5% to 3,882.78. Australia's S&P/ASX 200 edged down 0.2% to 8,848.80. South Korea's Kospi slipped nearly 0.2% to 3,424.60.

The U.S. federal government is nearing a budget deadline that could result in its shutdown.

Past shutdowns have been short-lived and had minimal impact on markets and the economy. But if the stalemate between Democratic and Republican lawmakers persists, that could delay the collection and release of economic data, such as on jobs and inflation.

This shutdown may also be different because the White House may push for large-scale firings of federal workers.

“It feels as though the market has already flogged the government shutdown story from every conceivable angle, the way traders circle a fading theme until there’s nothing left but dust. Yet with the clock ticking down to less than 24 hours before the doors are slated to close in Washington, the narrative refuses to die,” said Stephen Innes. managing partner at SPI Asset Management.

A report is due Friday about how many jobs U.S. employers created and cut last month. The hope is that it will be balanced enough to keep the Federal Reserve on track to continue cutting interest rates.

If Friday’s job numbers prove too strong, they could make the Fed less willing to cut rates. That could hurt stocks, which already face criticism that they’ve become too expensive following their big rally.

In energy trading, benchmark U.S. crude fell 97 cents to $62.48 a barrel. Brent crude, the international standard, lost $1.02 to $66.95 a barrel.

The U.S. dollar rose to 148.87 Japanese yen from 148.60 yen. The euro cost $1.1761, up from $1.1727.