LONDON — European markets sank Wednesday, tracking a U.S. and Asian sell-off as the Trump-fueled surge stumbled on doubts over his ability to fire up the world’s biggest economy. The dollar also struggled to recover losses against its major rivals as the euphoria of the U.S. post-election period faded. After hitting multiple records this month, Wall Street’s main indices suffered their worst losses since Donald Trump’s November election triumph, dragging Europe and Asia down with them as dealers fretted about his agenda. London stocks shed 0.8 percent in mid-morning trade, with top faller Kingfisher slumping 5.5 percent as the home-improvements chain’s annual results missed market expectations.
In the eurozone, Paris dropped 0.7 percent and Frankfurt lost 0.6 percent. The key cause for investors’ concern is Thursday’s vote in Congress on the replacement for Obamacare, with many Republicans opposed to it in its current form.
“After two months in office, markets want proof not just promises, fearful that the health care reform Trump is using to put his stamp on the presidency could delay the tax cuts and infrastructure spending markets desire so much more,” said analyst Mike van Dulken at trader Accendo Markets. Promises of infrastructure spending, tax cuts and deregulation were a key factor in the global markets rally. The president traveled up Pennsylvania Avenue Tuesday to warn the party it could lose its majority if it fails to push through his bill. If the Trump administration fails to secure support for his bill, analysts say that health reform would likely not take place until October, meaning economic reforms could be delayed until the end of this year at the earliest.
In London on Wednesday, the banking sector bore heavy losses with Barclays down 3.1 percent, Standard Chartered shedding 2.9 percent and Royal Bank of Scotland losing 2.1 percent.
Miners also took a bashing, with BHP Billiton down 2.1 percent and Rio Tinto dropping 2.2 percent in value.
“Financials and commodities have been the winners since the U.S. election — and these are the sectors under most pressure now as concerns rise that the Trump trade has gone too far, too fast, without seeing the relevant policy changes to support market expectations,” said Interactive Investor analyst Rebecca O’Keeffe.
Key Figures Around 1145 GMT
London – FTSE 100: DOWN 0.8 percent at 7,316.4
Frankfurt – DAX 30: DOWN 0.6 percent at 11,889.1 Paris – CAC 40: DOWN 0.7 percent at 4,968.8 EURO STOXX 50: DOWN 0.5 percent at 3,413.0 Tokyo – Nikkei 225: DOWN 2.1 percent at 19,041.4 (close) Hong Kong – Hang Seng: DOWN 1.1 percent at 24,320.4 (close) Shanghai – Composite: DOWN 0.5 percent at 3,245.2 (close) Euro/dollar: DOWN at US$1.0789 from US$1.0812 Pound/dollar: DOWN at US$1.2467 from US$1.2481 Dollar/yen: DOWN at 111.25 yen from 111.73 yen Oil – West Texas Intermediate: DOWN 58 cents at US$47.66 per barrel Oil – Brent North Sea: DOWN 62 cents at US$50.34 New York – Dow: DOWN 1.1 percent at 20,668.01 (close)