President Donald Trump's failure to reform U.S. health care, his first legislative setback since entering the White House in January, weighed on global stock markets Monday, with many investors cautious about his ability to deliver on other campaign promises, such as tax cuts and big infrastructure spending. The dollar was a major loser, falling to four-month lows against a basket of currencies.
KEEPING SCORE: In Europe, Britain's FTSE 200 fell 0.7 to 7,287 while France's CAC 40 dropped 0.3 per cent to 5,005. Germany's DAX was 0.7 per cent lower at 11,976. U.S. stocks were poised for losses at the open too with Dow futures and the broader S&P futures down 0.7 per cent.
U.S. HEALTH OVERHAUL: Analysts said the failure of Republicans in the House of Representatives to repeal Barack Obama's health care reforms raised questions about the prospect of Trump's pro-growth agenda from taxes to infrastructure to the budget. Trump and Republican leaders yanked their bill to repeal the Affordable Care Act off the House floor Friday when it became clear it would fail. Investors are waiting for more details about the state of Trump's business-friendly agenda.
ANALYST'S VIEWPOINT: "The problem for markets is two-fold, with the inability to pass the health care reforms meaning any tax cuts will be diminished, while markets are now left wondering whether the president's lack of support in Congress will make his tax cuts hard to pass in any form," said Joshua Mahony, market analyst at IG. "Incredibly, at a time when the Republicans control both the House and the Senate, we are faced with a position where internal factions mean Trump still cannot get the required support to make a meaningful impact as president."
DOLLAR DIVES: The U.S. currency has borne a large brunt of those concerns with the dollar index falling to its lowest level since the immediate aftermath of Trump's election victory last November. The euro was up 0.8 per cent at $1.0880 while the dollar slid 1 per cent to 110.17 yen.
OIL: The benchmark New York rate fell 31 cents to $47.67 a barrel while Brent crude, used to price international oils, lost 19 cents to $50.61 a barrel in London.
ASIA'S DAY: Japan's Nikkei 225 finished 1.4 per cent lower at 18,985.59, while South Korea's Kospi closed 0.6 per cent lower at 2,155.66. Hong Kong's Hang Seng declined 0.7 per cent to 24,180.10, while the Shanghai Composite Index was flat at 3,268.96. Australia's S&P/ASX 200 fell 0.1 per cent to 5,746.70.
This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.