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Asia bourses hit by Trump policy delay worries

Wednesday 02:35 GMT

Overview

Asian equities sank in the wake of the S&P 500’s biggest fall in more than five months as investors fretted that US President Donald Trump’s pro-growth policies could take longer than expected to come to fruition.

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The S&P 500 closed down 1.2 per cent on Tuesday, dragged lower by financial stocks. It was the first time since October 11 that the equity index ended more than 1 per cent lower, snapping a 109-session streak.

The mood turned as concerns grow over how long it could take the new president to achieve policy goals including tax cuts, infrastructure spending and reduced financial sector regulations, fuelled by hurdles facing Mr Trump’s efforts to push through a new heathcare law.

Equities

Australian and Japanese markets were having their worst day since the US election in November.

Australia’s S&P/ASX 200 was down 1.6 per cent, with the largest declines in the heavyweight financials and materials sectors.

In Tokyo the Topix index was down 1.9 per cent losses across the board. The Nikkei fell 2 per cent.

Hong Kong’s Hang Seng Index lost 1.2 per cent, while on the mainland China’s Shanghai and Shenzhen benchmarks were each down 0.5 per cent.

Forex

The dollar index, which tracks the greenback against a basket of peers, remained below the psychologically important 100-point mark. On Tuesday it closed below that level for the first time in a month.

The Japanese yen edged up 0.1 per cent against the dollar to ¥111.63, a four-month high, buoyed by data showing that exports grew more than analysts expected in February.

The South Korean won slipped 0.5 per cent to Won1,125.85 against the dollar, heading for its first fall in a week.

Fixed income

Investors rushed for perceived safety of government debt as stocks sold off. The yield on 10-year US Treasuries was down 0.7 basis points at 2.41 per cent, its lowest this month. Yields move inversely to prices.

In Japan the 10-year bond yield was down 0.4bp at 0.062 per cent, while Australia’s 10-year yield fell 5.3 basis points to 2.755 per cent, its lowest this month.

Commodities

Oil prices softened, still beset by concerns about high levels of crude inventories.

Benchmark Brent crude was down 0.1 per cent at $50.92 a barrel while West Texas Intermediate, the US benchmark, slipped 0.2 per cent to $48.16.

Gold was flat at $1,245.29 an ounce after jumping by $10.57 in the previous session.

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