Asia down on Trumponomics fears
hong kong — Asian markets fell on Monday and the dollar struggled on fears the collapse of Donald Trump’s repeal of Obamacare could mean he will struggle to push through his promised tax cut and infrastructure spending policies.
The healthcare reform was pulled on Friday as it failed to garner enough support among Trump’s Republican party, who have a majority in both houses of Congress.
While the tycoon said he would now move on to tax reform, the failure of the bill — which was seen as a litmus test for his ability to push through his economy-boosting agenda — has led to concern about future policies.
Global markets had surged since November on hopes the president’s pledges to overhaul the tax code, ramp up spending and deregulate markets would fire the already healthy economy.
‘Miserable failure’
“This was the first major attempt by the administration to reform the government and its miserable failure exposes the limits of President Trump,” Rodrigo Catril, a currency strategist at National Australia Bank in Sydney, told Bloomberg News.
Tokyo’s Nikkei index led losers, shedding 1.4 per cent as the dollar retreated against the yen, with analysts predicting it could fall as low as 107 yen. Toshiba lost 2.1 per cent on a report its troubled US nuclear unit is likely to start bankruptcy proceedings this week.
Sydney slipped 0.1 per cent and Seoul gave up 0.6 per cent. Singapore was 0.5 per cent lower. Hong Kong slipped 0.7 per cent and Shanghai closed 0.1 per cent off.
In early European trade, London slipped 0.8 per cent while Paris and Frankfurt each sank 0.9 per cent.
Greg McKenna, chief market strategist at AxiTrader, said: “If healthcare was complex, then so too will the tax be with the many moving parts and competing interests.” On currency markets, the greenback fell against its major peers and most high-yielding units, with the South Korean won up 0.9 per cent, Malaysia’s ringgit 0.3 per cent higher and the Indonesian rupiah up 0.2 per cent.
“How quickly the Whitehouse administration can pivot to and get a convincing message across on tax reform will likely be the major focus early in the week,” said Stephen Innes, senior trader at Oanda.
“The markets are desperately seeking any glimmer of optimism that the tax reform agenda can unite Republicans.” — AFP