Asian shares declined on Friday, but were still set for a weekly gain, as investors grew concerned over the progress of the US tax reform.
President Donald Trump’s push to be granted passage of the broadest tax cuts bill hit a snag on Thursday on the possibility that it could be losing important Senate votes.
Republican Senator Mike Lee was believed to be hesitant on the current version of the tax overhaul, while Senator Bob Corker, who voted no, stated that he would re-evaluate the final form of the bill.
Senator Marco Rubio also said that his vote would depend on whether key credit is expanded in a significant way. Refundable portion of the child tax credit is currently at $1,100.
Republicans can only lose two votes for the tax reform to still get pass through the Senate. If the voting resulted in a tie, Vice President Mike Pence would have the deciding vote.
Trump said that he wants a final bill for enactment before Christmas. If this happens, it would be Trump as well as the Republicans’ first major legislative win since he became President in January.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.4 percent to $553.95, following reports of the tax bill uncertainty.
Japan’s Nikkei 225 was down by 0.6 percent to ¥22,553.22, despite hints on the economy accelerating.
Figures presented by the Bank of Japan showed that big Japanese manufacturers’ sentiment rose to plus 25 during the three months to December, marking an 11-year high.
Senior market economist Ayako Sera said that the Nikkei broke away from its losses in the afternoon, mainly due to futures-led purchase, but added that regional sentiment is still fragile, which will restrain its upside.
Australia’s S&P/ASX 200 dropped 0.2 percent to A$5,997 after the close, as losses in the A-REITs, financials, and utilities drag stocks lower.
In mainland China, Shanghai Composite also slipped 0.8 percent to CN¥3,266.14, while Hong Kong’s Hang Seng index decrease declined 1 percent to HK$28,848.11.
South Korea’s KOSPI on the other hand, gained 0.5 percent to ₩2,482.07, while India’s BSE Sensex 30 edged higher by 0.6 percent to ₹33,472.
US stocks closed up lower on Thursday as doubts over the tax reform plan pressured sentiment, putting major indexes on the downside.
Overnight, Dow Jones Industrial Average declined by 0.3 percent to $24,508.66. S&P 500 fell 0.4 percent to $2,652.01, while the NASDAQ Composite index ended the session with a 0.2 percent lost to $6,856.53.
The tax overhaul has yet to get the vote of some particular Senators and investors are concerned regarding the negative impact on shares if the bill fails to acquire passage.
The Senate and the House are finalizing details of the tax bill as they prepare for a possible voting on the legislation expected as early as next week.
Senate Republicans passed the wide-ranging tax plan in a 51-49 vote earlier this month, with Senator Corker being the only Republican to join all 46 Senate Democrats and two independents in voting no on the bill.
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