* White House failure on healthcare raises worries over tax
* Asia markets less impacted on valuation bets
* Dollar falls to near two-month low
* Gold, bonds gain on broad risk aversion
By Saikat Chatterjee
HONG KONG, March 27 U.S. stock futures and the
dollar fell on Monday while Asian markets struggled as President
Donald Trump's failure on healthcare reform raised questions
about his ability to push through tax cuts and fiscal spending
to boost the economy.
Trump's inability to get enough support from his own
Republican party to "repeal and replace" the Obamacare health
insurance reforms, a major campaign promise, also spurred a rush
to safety assets such as gold and the Japanese yen
The depressed mood is set to pull European stock indexes
down at the open with main index futures seen off between 0.5
and 0.6 percent.
U.S. stock index futures fell 0.7 percent to a
six-week low in heavy volume, suggesting a weaker start on Wall
Street later in the day.
So-called "Trumpflation trades" - betting on an extended
recovery in the U.S. and global economies and related assets
such as commodities - came under heavy selling pressure.
"Markets have had a good run recently and this is a good
opportunity for profit taking across counters," said Alex Wong,
a fund manager at Ample Capital Ltd. in Hong Kong, with about
$130 million under management.
But Wong expects the selloff to be limited as cashed-up
investors waited on the sidelines.
MSCI's broadest index of Asia-Pacific shares outside Japan
was down 0.1 percent after posting its first
weekly decline last week in three weeks.
Japan's Nikkei fell 1.5 percent as the yen rebounded
in the face of renewed U.S. dollar weakness.
Growing U.S. policy uncertainty also raised concerns that a
recent pick-up in global business and consumer sentiment,
particularly in Asia, would start to fade.
In terms of relative valuations, U.S. stocks are trading
well above their historical averages while Asia stocks are still
broadly in line despite a recent bounce.
"Any big pull back in markets would be an opportunity for
long term investment in a region where potential is still
intact,” said Nicholas Yeo, head of China/Hong Kong equities at
Aberdeen Asset Management in Hong Kong, part of a team that
manages $374 billion in assets as of end-December 2016.
The dollar fell to a near two-month low against a basket of
The dollar index was down 0.3 percent at 99.287, its
lowest since Feb. 2.
It had risen to a 14-year high near 104.00 early in January
when expectations for significant stimulus under the Trump
presidency were at their peak.
"There isn't much going for the dollar right now and the
market will be bracing for its further decline." said Shin
Kadota, senior strategist at Barclays in Tokyo.
Fresh off the defeat on U.S. healthcare legislation on
Friday, the White House warned rebellious conservative lawmakers
on Sunday that they should get behind Trump's agenda or he may
bypass them on future legislative fights, including tax reform.
The Republican head of the tax-writing committee in the
House of Representatives said he hoped to move a tax bill
through his panel this spring.
The euro was 0.45 percent higher at $1.0847 following
a rise to $1.0849, its strongest early December.
U.S. Treasury yields were trading near one-month
lows with 10-year bonds closing in on 2.37 percent, its lowest
levels since Feb. 28.
Shanghai Futures Exchange copper slid 0.7 percent
to 46,680 yuan ($6,785) a tonne while Australia's benchmark
metals and mining index declined as much as 1.7 pct, its
lowest since March 14.
Oil prices were broadly flat as investor concerns lingered
that OPEC-led supply cuts were not yet reducing record U.S.
U.S. crude was trading down at $47.76 per barrel.
Safe-haven gold perked up, rising one percent to $1,257 an
(Additional reporting by Shinichi Saoshiro in TOKYO; Editing by
Eric Meijer and Kim Coghill)