Asian stocks got off to a weak start on Monday as caution among investors prevailed with lingering doubts about the future policy agenda of the new U.S. administration following the health-care reform failure.
Nikkei 225 finished 1.4 percent lower at 18,985.59 while South Korea’s Kospi closed 0.6 percent lower at 2,155.66. Hong Kong’s Hang Seng declined 0.7 percent to 24,180.10 while the Shanghai Composite Index was flat at 3,268.96. Australia’s S&P/ASX 200 fell 0.1 percent to 5,746.70. Stocks in Singapore and other Southeast Asian countries were lower.
Analysts said House Republicans’ failure to repeal Barack Obama’s health-care law raised questions about the prospect of President Donald Trump’s pro-growth agenda from taxes to infrastructure to the budget. The president and Republican leaders yanked their bill to repeal “Obamacare” off the House floor Friday when it became clear it would fail. The health-care act became a proxy for the rest of the Trump administration, dominating the global stock markets for most of last week. Investors are waiting for more details about the state of President Donald Trump’s business-friendly agenda.
“For Asian markets, a turbulent start to the week could be the case,” said Jingyi Pan, a market strategist at IG in Singapore. “Beyond the impact on health care, the vote had been seen as a test to the self-proclaimed deal-maker and the new administration’s abilities to also deliver other promises, including tax and infrastructure policies.”
U.S. stocks finished mixed on Friday after Republicans canceled a vote on their health care bill. Standard & Poor’s 500 index finished down 1.98 points, or 0.1 percent, at 2,343.98. The Dow lost 59.86 points, or 0.3 percent, to 20,596.72 as Goldman Sachs and Boeing sank. Technology companies inched higher and the Nasdaq composite rose 11.04 points, or 0.2 percent, to 5,828.74.
U.S. crude oil futures fell 43 cents to $47.54 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 27 cents to settle at $47.97 a barrel in New York on Friday. Brent crude, used to price international oils, lost 44 cents to $50.48 a barrel in London.
The dollar weakened to 110.21 yen from 111.34 yen while the euro rose to $1.0861 from $1.0799.