HONG KONG: Asian markets fell 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.
In a severe early blow to the new administration, the healthcare reform was pulled 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.
“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 percent as the dollar retreated against the yen, with analysts predicting it could fall as low as 107 yen. Toshiba lost 2.1 percent on a report its troubled US nuclear unit is likely to start bankruptcy proceedings this week.
Sydney slipped 0.1 percent and Seoul gave up 0.6 percent. Singapore was 0.5 percent lower.
Hong Kong slipped 0.7 percent and Shanghai closed 0.1 percent off.
In early European trade London slipped 0.8 percent while Paris and Frankfurt each sank 0.9 percent.
Greg McKenna, chief market strategist at AxiTrader, noted: “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 percent, Malaysia’s ringgit 0.3 percent higher and the Indonesian rupiah up 0.2 percent.