HONG KONG, China (AFP) — Asian markets moved narrowly on Wednesday as investors take a breather from recent gains while keeping an eye on Capitol Hill as US lawmakers close in on a massive tax overhaul.
Equities have been on a broad upswing since last week when holdout Republican senators said they would back Donald Trump’s headline legislation, which dealers are betting will fire up the world’s number one economy.
The House of Representatives passed the bill on Tuesday but will have to revote owing to a rules mix-up. It then moves to the Senate before being put on Trump’s desk to be signed off.
However, all three main Wall Street indexes ended Tuesday in the red — having clocked up a series of record closes of late — and the weak lead kept Asia tethered.
Hong Kong was down 0.1 percent and Shanghai lost 0.2 percent while Singapore shed 0.3 percent.
Tokyo ended the morning down 0.1 percent, while Seoul and Sydney were marginally higher.
Manila, Jakarta and Kuala Lumpur fell as Taipei and Wellington edged up.
Expectations that the massive reduction in corporate taxes would boost company profits have helped fuel the surge in equities but forex traders are more reticent about the effect on the economy, which has prevented the dollar from breaking out.
Bitcoin dives
“After all is said and done doubts about the overall economic impact from the US tax bill capped the dollar gains as the dollar sold off versus the yen and held losses against the euro after the House approved the bill,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“Currency traders continue to think the economic bump will be small while there’s increasing chatter that the markets have likely overemphasised the impact of tax repatriation flows in the overall dollar narrative.”
Bitcoin plunged around 15 percent Wednesday as dealers were spooked by news that an exchange in South Korea — where vast numbers of cryptocurrency traders live — had gone bust.
The unit, which hit a record $19,500 at the start of the week, took a hit as it emerged that Youbit had been hacked, leading the firm to say it will close and enter bankruptcy, according to Bloomberg News.
Also, on Tuesday US authorities suspended trading in a popular Bitcoin-related stock citing concerns about market manipulation. The Crypto Company’s share price had risen 1,700 percent between the end of September and Monday evening before the Securities Exchange Commission intervened to halt trades until January 4.
Bitcoin has soared almost 30-fold since the start of the year and this month saw it move into the mainstream as two major US exchanges began trading futures in the unit.
Key figures around 0230 GMT
Tokyo – Nikkei 225: DOWN 0.1 percent at 22,853.23 (break)
Hong Kong – Hang Seng: DOWN 0.1 percent at 29,229.06
Shanghai – Composite: DOWN 0.2 percent at 3,290.85
Euro/dollar: UP at $1.1844 from $1.1840 at 2150 GMT
Pound/dollar: UP at $1.3394 from $1.3384
Dollar/yen: UP at 112.92 yen from 112.86 yen
Oil – West Texas Intermediate: UP 17 cents at $57.73 per barrel (new contract)
Oil – Brent North Sea: UP 10 cents at $63.90 per barrel
New York – DOW: DOWN 0.2 percent at 24,754.75 (close)
London – FTSE 100: UP 0.1 percent at 7,544.09 (close)
© Agence France-Presse