SINGAPORE: Asian stocks tumbled on Tuesday dragged by Chinese markets and chip shares as investors worried about U.S. 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.
The dollar on the other hand is expected to benefit from some of the policies that will likely keep U.S. 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. Chinese shares slid while Hong Kong stocks tumbled 2.65%. Sentiment remained largely downbeat after Beijing's latest stimulus package failed to deliver the direct spending aimed at consumers that investors have been expecting.
Futures indicate European markets are set for a lower open, with pan-European STOXX 50 futures down 0.8%. "The medium-term outlook could become cloudier if Trump pursues aggressive tariff hikes ... This could fuel inflation eventually and stop the Fed from cutting rates. Tariffs also carry the risk of retaliation from the major trading partners."
Trump's victory and the election of pro-crypto candidates to Congress have supercharged a bitcoin rally to record highs closer to 90,000, and targeting $100,000 next. It was last at $88,516.