Asia markets mixed a day after mainland China sees 'Black Monday'; dollar tumbles
Markets in Asia were mixed on Tuesday as the dollar dived on headlines related to U.S. health-care reforms.
Japan's benchmark Nikkei 225 (ASX: .AXJO) index slid 0.63 percent and South Korea's Kospi (Korea Stock Exchange: .KS100) edged down 0.05 percent in early trade.
The S&P/ASX 200 (ASX: .AXJO) fell 0.98 percent, driven by broader losses across most sub-indexes. The heavily-weighted financials sub-index was down 1.7 percent.
The Hang Seng Index (Hong Kong Stock Exchange: .HSI) was up 0.14 percent.
Mainland markets were mixed after falling on what some have termed "Black Monday." The Shanghai Composite (Shanghai Stock Exchange: .SSEC) was up 0.06 percent and the Shenzhen Composite edged down by 0.233 percent.
The dollar sank on news that two additional Republican senators had opposed the Republican health-care bill . There are now four GOP senators who have voiced opposition to the bill, which is likely enough to stop it dead in its tracks: The GOP holds 52 seats in the Senate.
The dollar index (New York Board of Trade (Futures): =USD), which measures the dollar against a basket of currencies, traded at 94.800 at 9:52 a.m. HK/SIN. Against the yen, the greenback (Exchange: JPY=) fetched 112.22 yen, off levels around the 113 handle seen the last two weeks.
Meanwhile, the euro gained against the dollar to trade at $1.1530.
Investors were now more doubtful over the future of U.S. tax reforms, given the difficulty the health-care bill has faced in making progress, OANDA senior trader Stephen Innes told CNBC. The health-care bill being passed would have added money in the coffers for the government to enact subsequent tax reforms, Innes added.
"The market has a tendency to overreact, but it looks like another nail in the coffin (for the bill)," Innes said.
Markets also continued to digest better-than-expected second-quarter GDP from China released Monday. The Chinese growth rate was 6.9 percent on year compared to the 6.8 percent forecast in a Reuters poll.
Mainland markets stumbled on Monday despite the positive Chinese data, with analysts attributing dampened market sentiment to a financial policy meeting that took place at the weekend . The Shanghai Composite ended the Monday session down 1.4 percent and the Shenzhen Composite fell 4.3 percent.
The strong data is expected to provide a leg of support to commodity markets going forward, ANZ Research economist Giulia Lavinia Specchia said in a Tuesday note.
"Industrial metals were the main beneficiary, but the economic data continues to paint a positive picture for the entire sector," Specchia added.