Asian Stocks Fall, Dollar Holds Losses on Trump Ban: Market Wrap

Asian equities slid and gold extended gains after U.S. stocks fell the most since the November election, spurred by concern that Donald Trump may follow through with isolationist policies, overshadowing a pro-growth agenda.

The Topix index dropped before a Bank of Japan policy decision. The S&P 500 Index registered its biggest loss of the year as Trump’s order on immigration drew a rebuke from some Republican lawmakers, raising the specter of a rift between the executive and legislative branches. The dollar maintained losses and gold advanced for a third day. Oil was steady after two days of declines.

The selling of riskier assets as the week started represented the biggest market rebuke yet to the new administration’s preferences, after U.S. stocks had staged one of the best-ever post-election rallies on speculation Trump’s policies would accelerate the economy. While Trump on Monday promised to do a “big number” on the financial regulations in Dodd-Frank, bank shares plunged the most since Jan. 17. China, Hong Kong and Vietnam markets will be closed for holidays.

Here’s what’s coming up for the markets:

The Bank of Japan is expected to leave policy unchanged Tuesday as it concludes its first meeting of 2017. With markets increasingly convinced the central bank is done undertaking additional monetary easing for the foreseeable future, investors will look for hints of possible tightening ahead as the BOJ also releases its latest growth and inflation forecasts.
The Federal Reserve announces a policy decision on Wednesday. Like the BOJ, it is expected to leave lending rates where they are, though the Fed’s statement will be parsed for any reading on Trump’s impact on the world’s largest economy.
Trump plans to announce his nomination to the Supreme Court Tuesday, a move certain to dominate headlines and perhaps delay the presentation of further details on spending policies.
Apple Inc., Facebook Inc. and Amazon.com Inc. are among the major U.S. companies due to report results this week. Of the S&P 500 names to report so far, 73 percent have topped profit estimates. Japan will see earnings from companies including Sony Corp. and Honda Motor Co.

Read our Markets Live blog here.

Here are the main moves in markets on Tuesday:

Stocks

Japan’s Topix slumped 0.8 percent as of 9:51 a.m. in Tokyo, with banks and exporters leading declines for a second day. NEC Corp. tumbled 15 percent after cutting its full-year profit forecast.
Australia’s S&P/ASX 200 Index lost 0.7 percent, led by energy shares.
The S&P 500 fell 0.6 percent on Monday for its first three-day slide of 2017. The index fell as much as 1.2 percent before staging a late-day comeback. It’s up 1.9 percent in January and is higher by 6.6 percent since Trump’s election.
The Stoxx Europe 600 Index fell 1.1 percent and emerging-market equities declined by 0.3 percent.

Currencies

The Bloomberg Dollar Spot Index was little changed after dropping 0.3 percent on Monday. The gauge is trading near the lowest level in two months, and is down 2 percent for the year.
The yen was steady at 113.78 per dollar. It jumped 1.2 percent the previous session. 

Commodities

West Texas Intermediate crude was little changed at $52.64 a barrel, after losing 1 percent on Monday, capping a second straight day of losses. Drilling in the U.S. rose to the highest in more than a year, countering OPEC’s efforts to clear a supply glut.
Gold added 0.2 percent to $1,198.30 an ounce, after rising 0.4 percent the previous session.

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Australian 10-year yields were little changed at 2.73 percent after similar-dated Treasury yields ended Monday at 2.49 percent, after falling as low as 2.46 percent. 
Microsoft Corp. is returning to the market with a $17 billion deal to refinance its shortest-dated debt less than six months after it sought funds for its LinkedIn Corp. acquisition.

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