Asian stocks flat, euro slides on French election concerns

A man walks past an electronic board showing Japan's Nikkei average outside a brokerage in Tokyo, Japan, November 18, 2016. REUTERS/Toru Hanai · Reuters

By Nichola Saminather

SINGAPORE (Reuters) - Asian stocks were listless early on Tuesday after Wall Street slipped on concerns about U.S. President Donald Trump's ability to focus on economic policies, while the euro slid on fears an anti-European Union candidate may be elected France's next president.

MSCI's broadest index of Asia-Pacific shares outside Japan was flat, retaining most of its 0.36 percent gain from Monday.

Japan's Nikkei (.N225) fell more than 0.1 percent, driven lower by demand for the safe haven yen.

Australian shares (.AXJO) were up 0.2 percent, ahead of the central bank's policy meeting later in the session when it is expected to keep interest rates on hold.

On Monday, U.S. stocks posted losses of as much as 0.37 percent after Trump signed a revised executive order, effective March 16, banning citizens from six Muslim-majority countries from travelling to the United States for 90 days.

The new ban, coming after his first attempt was blocked in the courts, removes Iraq from the list and applies only to new visa applicants.

Trump's allegations over the weekend that he was wiretapped by his predecessor Barack Obama, without offering any evidence, have also raised concerns about his ability to focus on his promised economic measures, including tax cuts and a boost to infrastructure spending.

"While we don't pretend to know how (political) events will play out in the coming weeks and months, we suspect that they will continue to dominate the headlines, affecting investors' appetite for risk," Oliver Jones, assistant economist at Capital Economics, wrote in a note.

"Nonetheless, economic fundamentals have typically mattered more for equity prices. And we assume that this will remain the case."

European stocks also posted losses, with Deutsche Bank's (DBKGn.DE) 7.9 percent loss the biggest drag on the FTSEurofirst 300 index (FTEU3) after the German lender unveiled an 8 billion euro cash call as part of a major reorganization.

But European losses were limited by a deal by French carmaker PSA Group (PEUP.PA) to buy Opel from General Motors (GM.N) in a 2.2 billion-euro deal.

An agreement on the terms of a planned 11 billion pound tie-up between Aberdeen (ADN.L) and Standard Life (SL.L) also helped stocks.

The dollar index (.DXY), which tracks the greenback against a basket of trade-weighted peers, inched higher to 101.70 early on Tuesday, adding to Monday's 0.1 percent gain.

The euro (EUR=EBS) was flat at $1.05795, following a 0.4 percent slide on Monday after former French Prime Minister Alain Juppe ruled out standing in the country's presidential elections. Weakness in the single currency underpinned the dollar index.