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Asian stocks drop on Spain attack, Donald Trump turmoil

LiveMint logoLiveMint 18-08-2017 Garfield Reynolds

Sydney/Manila: Asian stocks extended a global slide after terrorists struck a crowded tourist street in Barcelona, exacerbating unease triggered by mounting concerns about dysfunction in President Donald Trump’s administration and US policy paralysis.

Equities fell from Tokyo to Sydney after the S&P 500 Index on Thursday tumbled 1.5%, its second-biggest drop for 2017. Volatility in Japan, South Korea and Hong Kong increased after a measure of market fluctuations spiked higher during US trading, while Australian bonds rose with the yen as investors sought havens.

US stocks declined amid concerns Trump’s stimulus plans are in increasing peril and amid heightened terror fears after at least 13 people died when a van plowed into pedestrians in Barcelona. Speculation surfaced at one point that Gary Cohn, the former Goldman Sachs Group Inc. president who’s Trump’s top economic adviser and has been a figure of assurance to investors in an unorthodox White House, might resign. Markets were calmed temporarily on reports that Cohn, who has been leading efforts on tax reform, would stay.

It’s been a tumultuous week for the administration, with Trump disbanding two advisory councils staffed by chief executive officers and slamming Republican members of Congress who were critical of his polarizing remarks following violence in Virginia. Meanwhile, the terror news was a reminder that geopolitical risks remain a threat, with nerves still raw after last week’s escalation of tensions on the Korean peninsula.

“The attack in Spain and the rising doubt that Trump will be able to push through with his economic policies are among a series of unfortunate events that’s creating uncertainty for investors to pullback and capitalize on their gains,” said Jonathan Ravelas, the chief market strategist at BDO Unibank, the largest Philippine lender.

Earlier, European stocks dropped as minutes from the region’s last central bank meeting revealed worries among officials that the currency could overshoot. Gold and tin were among the best-performing metals, and zinc traded near a 10-year high. Bloomberg

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