BANGKOK (AP) — Asian stock markets dealt calmly Wednesday with a partial U. S. government shutdown precipitated by the failure of lawmakers to agree on a temporary funding measure so the nation can pay its bills.

Hong Kong's Hang Seng index rose 0.7 percent to 23,013.23. Australia's S&P/ASX 200 was 0.1 percent higher at 5,210.50. South Korea's Kospi gained 0.1 percent to 2,001.41. Benchmarks in Indonesia, Taiwan and the Philippines also rose.

But Japan's Nikkei 225 index fell 0.7 percent to 14,382.11 after the government Tuesday announced it would go ahead with a sales tax increase in April. The tax, intended to offset the country's soaring public debt, will rise from 5 percent to 8 percent.

A partial shutdown of the U. S. government went into effect after Congress failed to approve short-term funding to keep the government functioning past Monday, which was the end of its fiscal year.

But analysts said they expect the budget fight in the Senate and the House between Democrats and Republicans to be resolved before the shutdown inflicts damage to the economy. About 800,000 employees — about a third of the federal workforce — are being forced off the job in the first government shutdown in 17 years, suspending most nonessential federal programs and services.

People classified as essential employees — such as air traffic controllers, Border Patrol agents and most food inspectors — will continue to work.

Cynthia Kalasopatan of Mizuho Bank Ltd. in Singapore said that "the bet is that the impasse in the two houses will be resolved sooner rather than later given the unpalatable situation of having to furlough some 800,000 workers."

Markets in mainland China were closed for public holidays, so couldn't react to a survey showing that manufacturing in the world's No. 2 economy barely expanded in September. Tuesday's report by the China Federation of Logistics and Purchasing showed manufacturing expanded for the third month in a row. But the group's purchasing managers' index rose by only a fraction to 51.1 last month from 51.0 in August, less than economists expected.

Benchmark oil for November delivery was down 54 cents to $101.50 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 29 cents to close at $102.04 on Tuesday.

In currencies, the euro fell to $1.3516 from $1.3518 late Tuesday. The dollar fell to 97.80 yen from 98.02 yen.

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Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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