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Asia: Markets enjoy small recovery after big losses
[HONG KONG] Most Asian markets edged up and the dollar saw a small recovery on Thursday as investors tracked a bounce in New York, with focus now on a crucial congressional vote on US healthcare reform later in the day.
However, the increases were marginal compared with the sharp sell-off suffered on Wednesday when equities tumbled across the board on fears Donald Trump's economy-boosting measures could be delayed by his struggles to push through his repeal of Obamacare.
There is widespread belief the tycoon's health system proposals will fall foul of lawmakers with many of his Republican counterparts opposed to numerous parts of it and raising questions about the fate of promised infrastructure spending, tax cuts and deregulation.
Greg McKenna, chief market strategist at AxiTrader, said: "A not inconsiderable risk is that the administration gets bogged down in the repeal of Obamacare, spends its political capital, and delays the tax and infrastructure plans that so boosted the market."
Mr McKenna added that the head of the Office of Management and Budget had said full details of the 2018 budget would not be available until May, adding to investors worries.
But Wall Street's three main indexes climbed on Wednesday, giving some impetus to Asia, which followed suit in early trade.
Tokyo was up 0.1 per cent by the break, Hong Kong added 0.3 per cent, Shanghai put on 0.2 per cent, Sydney also gained 0.2 per cent and Seoul was 0.3 per cent higher. Singapore, Manila and Jakarta also eked out small gains.
"Despite the amount of ink spilt over the healthcare vote, fundamentally the US economic landscape looks bright, and investors were quick to snap up bargains," Stephen Innes, senior trader at Oanda, said in a note.
"With little on the economic calendar, traders remain glued to the shifting tides of the healthcare negotiations." The dollar enjoyed some tentative buying, edging up slightly against its major peers but it is still stuck at five-month lows against the yen.