* Dollar steady after recovering from four-month low
* European stocks poised for a positive start
* Investors more confident Trump can build support for
* Oil prices recover after Monday's drop but limited by glut
By Nichola Saminather
SINGAPORE, March 28 Asian stocks advanced on
Tuesday after Wall Street stabilized and the dollar was steady,
as anxiety over Donald Trump's setback on healthcare reform gave
way to tentative hopes for the U.S. president's planned stimulus
European markets were also set for a stronger start, with
financial spreadbetters expecting Britain's FTSE 100 and
France's CAC 40 both to open 0.3 percent higher and
Germany's DAX to start the day up 0.4 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan
added 0.5 percent.
Japan's Nikkei closed up 1.1 percent, its biggest
one-day gain in more than two weeks, while Australian stocks
ended the day 1.3 percent higher, their strongest
performance since Nov. 23.
South Korean stocks climbed 0.4 percent after data
showed the domestic economy grew at a slightly faster pace than
initially thought in the fourth quarter of 2016, supported by
strong construction activity.
Hong Kong's main Hang Seng added 0.5 percent.
China's market was one of the region's underperformers amid
concerns about tightening liquidity conditions after the central
bank refrained from injecting short-terms funds into the banking
system for the third session in a row.
The CSI 300 index was about 0.2 percent lower and
the Shanghai Composite was down 0.4 percent
Overnight, the S&P 500 and the Dow Jones Industrial
Average closed lower but narrowed their losses from
earlier in the session, when both hit near-six-week lows. The
Nasdaq ended higher.
Stock markets, which went on a tear after Trump's November
election win, got an added lift from the Federal Reserve's
less-hawkish-than-expected stance in mid-March. But doubts about
Trump's ability to keep his promises of fiscal stimulus,
including tax reform, halted the rally.
Trump's failure late last week to garner enough support for
a plan to repeal the Affordable Care Act, former President
Barack Obama's signature health care bill, even with a Congress
controlled by the leader's Republican party, further dented
While that blow stoked concerns about the president's
ability to enact stimulus policies, these began to recede
overnight as investors looked with renewed, albeit tentative,
optimism to the U.S. government's next policy steps.
"Markets appear reluctant to take the Trump disappointment
too much further at this stage," Ric Spooner, chief market
analyst at CMC Markets in Sydney, wrote.
"With U.S. economic growth showing signs of improvement and
the (Fed) clearly embarked on a monetary tightening cycle, the
significant correction that has already occurred in bonds and
the U.S. dollar may already reflect an adequate wind-back of the
market’s Trump exuberance."
Tim Condon, economist at ING Financial Markets, said in the
Reuters Global Market Forum chatroom that he "would not
anticipate any more Democrat support for Republicans' tax reform
than for ObamaCare reform."
But "the good news for investors is that the global economy
is picking up," Condon said. "I view the current selling as a
The U.S. 10-year bond yield, which hit a
one-month low on Monday, rose to 2.3836 percent on Tuesday.
The dollar was little changed at 110.63 yen after
recovering from its lowest level since November on Monday.
The dollar index inched up to 99.226 after slumping
to a 4-1/2-month low on Monday.
The euro was steady at $1.0861 on Tuesday, after
touching its highest point since November on Monday.
Sterling was flat at $1.2554, with Prime Minister
Theresa May due to formally notify the European Union of
Britain's intention to leave the club on Wednesday. It hit a
seven-week high on Monday.
In commodities, the return of risk appetite and the dollar's
relative weakness helped lift oil from a level close to the
3-1/2-month low seen last week, but gains were capped by
lingering concerns about whether OPEC-led output cuts can offset
surging U.S. production.
U.S. crude gained 0.5 percent to $47.98 a barrel,
after dropping as much as 1.9 percent on Monday.
Global benchmark crude rose 0.5 percent to $50.99.
Gold was flat at $1,253.83 an ounce on Tuesday, after
pulling back from the one-month-high touched on Monday.
(Reporting by Nichola Saminather; Additional reporting by Billy
Chan; Editing by Shri Navaratnam and Richard Borsuk)