Asia stocks under pressure as Trump fails to get healthcare reform passed

US President Donald Trump failed to get healthcare reform passed

Asian stocks are set to start the week on a cautious note as US President Donald Trump's stunning failure to get healthcare reform passed raised concerns about the prospects for his plans to use fiscal stimulus to boost economic growth.

Financial markets were unnerved on Friday by Trump's inability to get enough support for legislation to "repeal and replace" the Obamacare health insurance reforms, a major 2016 election campaign promise.

Despite some recent profit-taking, US stocks are still up more than 12 percent since Trump was elected on November 8, the stock prices reflecting views that lower taxes, deregulation and fiscal stimulus would boost economic growth and corporate earnings.

But the failure of Trump's healthcare bill knocked the wind out of risky assets in early Asian trading with US stock index futures falling to a six-week low in heavy volumes while Treasury futures edged higher and MSCI's broadest index of Asia-Pacific shares outside Japan. US was flat in early trade though Australia's stock market tumbled 0.9 percent at the open. Rising policy uncertainty also raised concerns that a recent revival in business and consumer sentiment, particularly in Asia as evident from recent industry surveys, would be derailed at a time when market valuations appeared stretched.

"For markets, that doesn't sound like an ideal situation," ANZ strategists wrote in a daily note.

The greenback took a spill in early Asian trade on Monday with early moves exaggerated in a very thin market.

The US dollar was down 0.8 percent against the yen at one stage to a 110.44.

The euro rose to a near four-month peak at $1.0847. Against a basket of currencies, the dollar was down nearly half a percent at 99.306.

Treasury futures gained 5/32s in price, suggesting benchmark yields would start lower. On Friday, benchmark 10-year US yields closed near their lowest levels in a month.

Safe-haven gold perked up, rising to $1,253 an ounce.

Oil prices were broadly flat as investor concerns lingered that OPEC-led supply cuts were not yet reducing record US crude inventories.

US crude was trading slightly higher at $48.15 per barrel.