Asia markets sink with Wall St on fears for Trump agenda

Asian markets tumbled Wednesday, tracking a US and European sell-off as the Trump-fuelled surge in equities went into reverse on doubts about his ability to fire up the economy.

The dollar also struggled to recover against its major rivals and suffered fresh losses against high-yielding units as the euphoria of the US post-election period faded.

After hitting multiple records this month, Wall Street's main indexes suffered their worst losses since Donald Trump's win, dragging Europe down with them, as dealers fret about his agenda.

The key cause for concern is Thursday's vote in Congress on the replacement for Obamacare, with many Republicans opposed to it in its current form. 

Analysts say the inexperienced Trump is spending too much political capital on the issue, and if he cannot push it through a Republican-controlled Capitol Hill, then his other plans -- particularly infrastructure spending, tax cuts and deregulation -- could be in trouble. Such promises were a key factor in the global markets rally.

The president travelled up Pennsylvania Avenue Tuesday to warn the party it could lose its majority if it fails to push through his bill.

- 'Ugly sea of red' -

“There is an ugly sea of red across global markets,” said Greg McKenna, chief market strategist at AxiTrader, said in a note, adding that traders were succumbing to "fears that the positive benefits of Trumponomics are going to be delayed".

“The impact of this is that the tax and infrastructure policy and implementation the market has been aching for looks set to be delayed. This is a sign that investors are losing faith in Trumponomics."

Tokyo ended more than two percent lower as the dollar sank to its lowest level against the yen since November, while Hong Kong shed 1.1 percent and Shanghai closed down 0.5 percent.

Sydney was 1.6 percent lower, Singapore shed 1.2 percent and Seoul slipped 0.5 percent. Wellington, Taipei, Manila and Jakarta also suffered hefty losses.

And in early European trade London fell 0.6 percent, Frankfurt shed 0.8 percent and Paris was 0.7 percent off.

With expectations of economy-friendly measures petering out, the dollar has taken a severe hit. It extended Tuesday's losses against the yen but held its ground against the pound and euro.

However, the South Korean won jumped 0.3 percent, Australia's dollar rallied 0.9 percent and the Indonesian rupiah was 0.2 percent higher. The Mexican peso, which after Trump's win hit regular record lows, was more than one percent up.

"The dollar positions accumulated in the buildup and immediate aftermath of the US election look to have been fully unwound," Bank of America strategists led by Myria Kyriacou wrote in a research note, according to Bloomberg News.

- Key figures around 0800 GMT - 

Tokyo - Nikkei 225: DOWN 2.1 percent at 19,041.38 (close)

Hong Kong - Hang Seng: DOWN 1.1 percent at 24,320.41 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,245.22 (close)

London - FTSE 100: DOWN 0.6 percent at 7,336.30

Euro/dollar: DOWN at $1.0802 from $1.0815

Pound/dollar: DOWN at $1.2480 from $1.2488

Dollar/yen: DOWN at 111.52 yen from 111.67 yen

Oil - West Texas Intermediate: DOWN 39 cents at $48.85 per barrel

Oil - Brent North Sea: DOWN 35 cents at $50.61

New York - Dow: DOWN 1.1 percent at 20,668.01 (close)

Source: AFP