Asian markets mostly down as tax cut euphoria wanes

Asian markets fell on Thursday as investors took a step back following recent gains after Donald Trump's tax reform bill finally passed through Congress, giving him a much-needed legislative victory.

Equities have rallied this year on expectations the president's promised cuts would fire the already strong economy and those gains increased over the past week as it became clear that months of bargaining would see them eventually pushed through.

Trump proclaimed "We are making America great again" to Republican lawmakers at the White House after their victory.

However, with the uncertainty out of the way traders decided to cash in.

"President Trump finally has a piece of legislation passed. There has already been a lot of optimism priced in," said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

"I believe this is a perfect example of buy the rumour sell the news. We may see a bit of profit taking coming into the back end of the year.

"I believe the next catalyst for the upside will be reductions in regulations once Jerome Powell takes over the helm at the US Federal Reserve. The lack of reaction by the markets overnight is testimony (to) the level of optimism already being priced in."

All three main Wall Street indexes ended lower, having broken various records in recent weeks, and Asia followed.

Tokyo ended the morning 0.4 percent lower, with dealers awaiting the end of a Bank of Japan policy meeting later in the day to see if it gives any clues about its plans for further economic stimulus.

Shanghai shed 0.3 percent and Sydney was 0.2 percent off.

Seoul sank 1.1 percent and Singapore was 0.2 percent lower, though Hong Kong edged up 0.1 percent.

The dollar was also struggling despite expectations the tax cuts across the board would likely fan inflation and lead to higher interest rates.

Greg McKenna, chief market strategist at AxiTrader, said: "Forex traders remain nonplussed about the US dollar, which continues to struggle to gain traction. I ask you if the governments of the EU had got together to pass a tax cut what would the impact on the euro be. Not nothing, that's for sure."

Dollar traders are now looking ahead to the release of US personal consumption data Friday, which could provide some idea about the Fed's plans for monetary policy next year.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: DOWN 0.4 percent at 22,806.28 (break)

Hong Kong - Hang Seng: UP 0.1 percent at 29,253.45

Shanghai - Composite: DOWN 0.3 percent at 3,277.30

Euro/dollar: UP at $1.1875 from $1.1871 at 2200 GMT

Pound/dollar: DOWN at $1.3363 from $1.3376

Dollar/yen: DOWN at 113.30 yen from 113.40 yen

Oil - West Texas Intermediate: DOWN four cents at $58.05 per barrel

Oil - Brent North Sea: DOWN four cents at $64.52 per barrel

New York - DOW: DOWN 0.1 percent at 24,726.65 (close)

London - FTSE 100: DOWN 0.3 percent at 7,525.22 (close)