SINGAPORE- Asian stocks tumbled on Tuesday dragged by Chinese markets and chip shares as investors worried about US President-elect Donald Trump’s policies, while bitcoin hit a record peak on bets on assets that are set to benefit from the new administration.
Investors anticipate Trump’s second four-year term in office will bring equities-boosting tax cuts and looser regulations, lifting the world’s biggest and best-known cryptocurrency, bitcoin to an all-time high of $89,637.
But the threat of possible tariffs from the new White House administration has put the euro and China’s yuan under pressure. The single currency touched a near seven-month nadir of $1.0687 overnight and was last at $1.064075, while the onshore yuan slipped to an over 3-1/2-month low.
The dollar on the other hand is expected to benefit from some of the policies that will likely keep US interest rates relatively higher for longer. The dollar index which measures the greenback versus six peers, was at 105.59, just shy of the 4-month high hit on Monday.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.7 percent to its lowest since Sept. 25, with Taiwan shares sliding over 2 percent and South Korean stocks 1 percent lower.
Chip stocks in the region have been reeling this week after Reuters reported that the US ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in AI applications.
Chinese shares slid while Hong Kong stocks tumbled 2.65 percent. Sentiment remained largely downbeat after Beijing’s latest stimulus package failed to deliver the direct spending aimed at consumers that investors have been expecting.
Analysts also pointed to reports of Trump tapping US Senator Marco Rubio to be his secretary of state, arguably the most hawkish option.
“The market is now worrying that there will be more rapid negative China policy emerging from the Trump administration with his new cabinet picks,” said Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong. “Their hawkishness could be more than expected.”