News

By Ankur Banerjee

SINGAPORE (Reuters) -Asian stocks tumbled on Tuesday dragged by Chinese markets and chip shares as investors worried about U.S. President-elect Donald Trump's policies, while bitcoin hit a record peak on bets on assets that are set to benefit from the new administration.

Investors anticipate Trump's second four-year term in office will bring equities-boosting tax cuts and looser regulations, lifting the world's biggest and best-known cryptocurrency, bitcoin, to an all-time high of $89,637.

But the threat of possible tariffs from the new White House administration has put the euro and China's yuan under pressure. The single currency touched a near seven-month nadir of $1.0687 overnight and was last at $1.064075, while the onshore yuan slipped to an over 3-1/2-month low.

The dollar on the other hand is expected to benefit from some of the policies that will likely keep U.S. interest rates relatively higher for longer. The dollar index, which measures the greenback versus six peers, was at 105.59, just shy of the 4-month high hit on Monday.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 1.7% to its lowest since Sept. 25, with Taiwan shares sliding over 2% and South Korean stocks 1% lower.

Chip stocks in the region have been reeling this week after Reuters reported that the U.S. ordered Taiwan Semiconductor Manufacturing Co to halt shipments of advanced chips to Chinese customers that are often used in AI applications.

Chinese shares slid while Hong Kong stocks tumbled 2.65%. Sentiment remained largely downbeat after Beijing's latest stimulus package failed to deliver the direct spending aimed at consumers that investors have been expecting.

Analysts also pointed to reports of Trump tapping U.S. Senator Marco Rubio to be his secretary of state, arguably the most hawkish option.

"The market is now worrying that there will be more rapid negative China policy emerging from the Trump administration with his new cabinet picks," said Steven Leung, executive director of institutional sales at UOB Kay Hian in Hong Kong. "Their hawkishness could be more than expected."

Futures indicate European markets are set for a lower open, with pan-European STOXX 50 futures down 0.8%.

Data provider DDHQ projected on Monday that Trump's Republican Party had won a majority in the U.S. House of Representatives, signalling a majority for Republicans in both chambers of Congress.

Vasu Menon, managing director of investment strategy at OCBC, said the decisive win by Trump and the Republican party removes the overhang of an unclear or a contested U.S. election outcome.