Stocks, dollar cut losses on hope Trump can move past healthcare

Trump health-care obamacare

Trump health-care obamacare

Risk appetite had evaporated after Trump's failure to garner enough support last week to pass a bill repealing the Affordable Care Act, former President Barack Obama's signature health care bill, even with a Republican-controlled Congress.

The euro was steady at $1.0861 on Tuesday, after touching its highest point since November on Monday.

Sterling rose to an eight week high against the US Dollar as markets opened for the week on Monday, strengthening 0.3%.

The anxiety sent gold, the traditional refuge during volatility, surging to a one-month high at US$1,256.79 an ounce.

Connor Campbell, analyst at SpreadEx, told The Telegraph: "Given the global indices had been inflated by the President's various promises, it is no surprise the reaction to his "Trumpcare" failure has been so vitriolic".

Given Trump's healthcare setback, several analysts pointed out that he might not be able to push through his tax-cutting, infrastructure spending, deregulation plans, and would therefore leave the administration with an inadequate cash to pay for such measures.

The Nasdaq Composite .IXIC finished the day positive, while the Dow Jones Industrial Average .DJI ended the day down 0.22 percent, its eighth straight day of declines. Europe's broad FTSEurofirst 300 index closed down 0.37 per cent at 1,479.05.

The euro rose to a near four-month peak at $US1.0847 ($A1.4210).

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The dollar was also little changed at 110.62 yen after recovering from its lowest level since November on Monday.

The key outside markets on Tuesday morning see the US dollar index slightly higher on a technical bounce after scoring a 4.5-month low on Monday.

The index had risen to a 14-year high near 104.00 in early January when expectations for inflation-boosting U.S. stimulus under the Trump presidency were at their peak. US crude was up 0.81 cents, or 1.7 percent, at $48.54 per barrel.

DBS chief investment officer Lim Say Boon said: "Analysts say the share sell-off is unsurprising given the intensity of the rally since USA election, which saw the S&P 500 surging 9.6 per cent, Nasdaq jumping 12.2 per cent and the STI gaining 12.1 per cent". Germany's DAX outperformed its peers somewhat, trading 0.5 percent higher at 12,052.

Oil fell further towards $50 a barrel, pressured by uncertainty over whether an OPEC-led production cut will be extended beyond June in an effort to counter a glut of crude.

Benchmark 10-year notes were flat to up in price, after trading higher all morning, to yield 2.368 percent, down slightly from 2.375 percent on Monday.

Year-to-date, the SPDR Gold Trust (GLD) has gained 8.4%, the VanEck Vectors Gold Miners ETF (GDX) has risen 9.6%, while the PowerShares DB US Dollar Index Bullish Fund (UUP) has retreated 2.7%.

US crude gained 0.5 percent to $47.97 a barrel, after dropping as much as 1.9 percent on Monday.

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