Asian stocks sink as US politics weigh on market outlook
By YURI KAGEYAMA
Jul. 18, 2017
TOKYO (AP) — Asian shares fell Tuesday as setbacks for a health care overhaul in the U.S. cast doubt over prospects for a range of reforms backed by President Donald Trump. Expectations the U.S. Federal Reserve will move cautiously in raising interest rates also sent the dollar lower.
KEEPING SCORE: Japan's benchmark Nikkei 225 lost 0.6 percent to 19,991.86 in morning trading as the yen gained against the dollar. Australia's S&P/ASX 200 dipped 1.1 percent to 5,692.00. South Korea's Kospi edged 0.1 percent lower to 2,422.30. Hong Kong's Hang Seng lost 0.3 percent to 26,391.60, while the Shanghai Composite slipped 0.2 percent to 3,169.57.
WALL STREET: All markets ended virtually flat, with the Standard & Poor's 500 index down 0.13 points at 2,459.14. The Dow Jones industrial average shed 8.02 points to 21,629.72. The Nasdaq composite gained 1.97 points to 6,314.43. The Russell 2000 index of smaller-company stocks rose 2.79 points, or 0.2 percent, to 1,431.60.
HEALTHCARE REFORM: The Senate Republican health care bill appeared doomed when two more GOP senators announced they would vote no in an initial, critical vote expected as soon as next week. The implosion leaves the divided GOP with its flagship legislative priority in tatters.
THE QUOTE: "The U.S. health care bill is back in the limelight," Stephen Innes of OANDA said in a commentary. "This headline has massive implications to amend Obamacare and brings a huge element of doubt over the tax reform. Equity futures are wobbling, the dollar is selling off. Gold has picked up its allure again given the heightened political risk landscape."
POLICY OUTLOOK: After Federal Reserve Chair Janet Yellen's dovish comments last week on the pace of future interest rates, attention turns to meetings of the Bank of Japan and the European Central Bank. Given weak recent inflation trends, both central banks appear wary of major policy tightening moves.
ENERGY: Benchmark U.S. crude added 8 cents to $46.10 a barrel in electronic trading on the New York Mercantile Exchange. It lost 52 cents, or 1.1 percent, to $46.02 a barrel in New York. Brent crude, used to price international oils, rose 9 cents to $48.51 a barrel in London.
CURRENCIES: The dollar has been weakening as investors conclude the U.S. government is unlikely to enact a significant infrastructure spending package to boost the economy. The dollar slipped to 112.12 yen from 112.66 yen late Monday in Asia. The euro rose to $1.1536 from $1.1460.
Yuri Kageyama can be reached on Twitter at https://twitter.com/yurikageyama
Her work can be found at https://www.apnews.com/search/yuri%20kageyama