Asian markets push past Trump’s policy stumble

Region’s equities rise as investors look ahead to planned stimulus

Asian stocks advanced on Tuesday after Wall Street stabilized and the dollar was steady, as anxiety over Donald Trump’s setback on healthcare reform gave way to tentative hopes for the US president’s planned stimulus policies.

MSCI’s broadest index of Asia- Pacific shares outside Japan added 0.5 percent.

Japan’s Nikkei closed up 1.1 percent, its biggest one- day gain in more than two weeks, while Australian stocks ended the day 1.3 percent higher, their strongest performance since November 23, 2016.

South Korean stocks climbed 0.4 percent after data showed the domestic economy grew at a slightly faster pace than initially thought in the fourth quarter of 2016, supported by strong construction activity.

Stock markets went on a tear after Trump’s November election win. But doubts about his ability to keep his promises of fiscal stimulus, including tax reform, halted the rally.

Trump’s failure late last week to garner enough support for a plan to repeal the Affordable Care Act, former President Barack Obama’s signature health care bill, even with a Congress controlled by the leader’s Republican party, dented sentiment.

While that blow stoked concerns about the president’s ability to enact stimulus policies, these began to recede overnight as investors looked with renewed, albeit tentative, optimism to the US government’s next policy steps.

“Markets appear reluctant to take the Trump disappointment too much further at this stage,” wrote Ric Spooner, chief market analyst at CMC Markets in Sydney. “With US economic growth showing signs of improvement and the [ Fed] clearly embarked on a monetary tightening cycle, the significant correction that has already occurred in bonds and the US dollar may already reflect an adequate wind- back of the market’s Trump exuberance.”