Asia Volatility Rises as Stocks Fall After U.S. Health-Care Flop

  • Japanese equities fall to lowest in almost two months
  • China, Hong Kong markets pare earlier gains to register losses

Gauges measuring expected stock swings in Asia climbed as shares across the region slid following a U.S. lead after the defeat of the bill to repeal and replace Obamacare on Friday.

Japan’s Nikkei Volatility Index rose to 19.8, the highest in two months, while barometers that measure fluctuations in Australian and Hong Kong stocks increased to 12.6 and 13.9 respectively. In the U.S., the Chicago Board Options Exchange SPX Volatility Index gained by 15 percent last week in biggest weekly gain since Dec. 30.

The Obamacare repeal and replace brings further into question whether Trump has the ability and character to do his job as president, said James Soutter, a fund manager at K2 Asset management in Melbourne. Asian market sentiment will take a hit from Trump’s inability to pass legislation amid concerns that future economic growth and demand from the U.S. will not be as great as hoped, he said.

The MSCI Asia Pacific Index dropped 0.3 percent as of 4:46 p.m. Hong Kong time led by material stocks as about three in every four companies fell. Japan’s Topix slid to its lowest since early February as the yen spiked to a four-month high.

Summary

  • Hong Kong’s Hang Seng Index -0.7%, Hang Seng China Enterprises Index -1.1%; Shanghai Composite -0.1%
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  • Japan’s Nikkei 225 -1.4%, Topix -1.3%
  • Australia’s S&P 200 Index -0.1%
  • South Korea’s Kospi -0.6%; Taiwan’s Taiex -0.3%
  • Singapore’s Straits Times Index -0.5%; FTSE Bursa Malaysia KLCI little changed; Jakarta Composite Index -0.6%; Philippine Stock Exchange Index -0.3%; Thailand’s SET Index -0.2%
  • India’s S&P BSE Sensex Index -0.5%
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