(MENAFN- Gulf Times) Global stock markets sank yesterday as a Trump-fuelled surge stumbled on doubts over his ability to fire up the world's biggest economy.
The dollar also struggled against its major rivals as the euphoria of the US post-election period faded.
Wall Street came under renewed selling pressure a day after it suffered its worst one-day losses since Donald Trump's election, with analysts also blaming falling oil prices for the downturn.
'Financial markets have moved into risk averse mode as traders appear to lose faith in Donald Trump's ability to deliver on his ambitious election pledges, said Craig Erlam of Oanda.
'A Trump-led fiscal boost and rising oil prices have come unstuck in the past fortnight, added Jasper Lawler, senior market analyst at London Capital Group.
A shooting outside the British parliament 'did little to calm nervous investors in the City of London, Lawler said.
The attack had, however, little measurable impact on London's stock market index which closed only marginally lower than its European counterparts.
The FTSE 100 lost 0.7% at 7,324.72, Frankfurt's DAX 30 was down 0.5% at 11,904.12 and in Paris CAC 40 dropped 0.2% to 4,994.70 at close yesterday.
'Even though this news is terrible, financial markets are not reacting to it too strongly, City Index analyst Kathleen Brooks told AFP.
Among big movers in the FTSE index, top faller Kingfisher slumped nearly 5% as the home-improvements chain's annual results missed market expectations.
The banking sector also bore heavy losses and miners took a bashing.
The key cause for investors' concern is today's vote in Congress on the replacement for Obamacare, with many Republicans opposed to it in its current form.
'After four plus months of promises and two months in office, investors are worried that the Trump rally has gone too far on promises alone, now desiring some proof, said Mike van Dulken, analyst at Accendo markets.
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.
'The key question now is what will happen next, said Fawad Razaqzada, analyst at Forex.com. 'The sell-off could easily last several days and this may well turn out to be a long-term top for the markets. Or it could just be a pause before we see another rally into new all-time highs.
In commodities, oil prices dived close to a four-month low on growing concerns over rising crude stockpiles in top consumer the United States.
At one point during the day, Europe's benchmark North Sea Brent crude slipped below $50 per barrel, its lowest value since late November.
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