SINGAPORE: Asian share markets and Wall Street stock futures fell on Monday after immigration curbs introduced by United States President Donald Trump heightened concerns about the impact of the new administration’s policies on trade and the economy.
European markets were also poised for a sluggish start, with financial spreadbetter CMC Markets expecting Germany’s DAX to start the day 0.3 per cent lower, Britain’s FTSE 100 to open down 0.4 per cent, and France’s CAC 40 to fall 0.5 per cent.
The US president on Friday put a 120-day hold on allowing refugees into the country, an indefinite ban on refugees from Syria and a 90-day bar on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
The executive order led to huge protests in many US cities and a raft of legal challenges amid confusion over its implementation.
It has also raised worries about the potentially destabilising impact of Trump’s policies.
“Trump always stated these were policies he would implement,” said James Woods, Global Investment Analyst at Rivkin Securities in Sydney.” Quite a lot of it was brushed off as ‘campaign rhetoric’ but he is following through.
“This renews concerns about a trade war with China that would significantly affect both Asian and the global economy,” Woods said.
“The biggest threat to markets at the moment is if Trump continues down the path of protectionism without focusing on economic policies.”
MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.4 per cent in holiday-thinned trade.
Australian shares closed down 0.9 per cent, while New Zealand ended the day 0.7 per cent lower.
Japan’s Nikkei was down 0.5 per cent for the day as demand for the safe-haven yen weighed on exporters.
Pointing to a weaker opening on Wall Street, S&P Nasdaq and Dow Jones futures all pulled back around 0.2 per cent.
Trump’s immigration orders have created legal uncertainty domestically and drawn criticism from abroad.
Several countries, including long-standing American allies, criticised Trump’s directive as discriminatory and divisive.
US judges in at least five states blocked federal authorities from enforcing Trump’s executive order, but lawyers representing people affected said some authorities were unwilling on Sunday to follow the judges’ rulings.
US 10-year Treasury yields were last at 2.4752 per cent, after falling to as low as 2.462 per cent earlier and down from Friday’s close of 2.481 per cent.
The dollar index, which tracks the greenback against a basket of trade-weighted peers, dipped about 0.2 per cent to 100.34 in Asian trade, after touching a session low of 100.17.
The dollar also weakened 0.4 per cent to 114.6 yen on Monday, pulling away from a one-week high hit on Friday. “If price action is any guide it would appear that (Trump’s) new executive order regarding immigration signed over the weekend appears to have gone down less well with financial markets as early weakness in the US dollar and Asia stocks suggest that markets fear some significant economic blowback,” Michael Hewson, Chief Market Analyst at CMC Markets in London, said.
Adding to pressure on markets, data on Friday showed US economic growth slowed more than expected in the fourth quarter, with gross domestic product rising at a 1.9 per cent annual rate, below the 2.2 per cent rise expected by economists and the 3.5 per cent growth pace logged in the third quarter.
Earnings disappointments also weighed, led by Chevron, whose quarterly profit missed expectations, and Starbucks, which trimmed its full-year revenue forecast.
Markets will also be watching US inflation data later on Monday, manufacturing data and the Federal Reserve meeting’s outcome on Thursday, and Friday’s non-farm payrolls figure.— Reuters
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