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Bitcoin extends sweeping rally; eyes $100K

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Tariff worries weigh on euro, yuan

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Asian chip stocks struggle on clamp-down fears

(Updates at 0625 GMT)

By Ankur Banerjee

SINGAPORE, Nov 12 (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 ( TSM ) 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.

"The medium-term outlook could become cloudier if Trump

pursues aggressive tariff hikes ... This could fuel inflation

eventually and stop the Fed from cutting rates. Tariffs also

carry the risk of retaliation from the major trading partners."

"But this is a story for another time and Trump's victory

has unleashed the animal spirit in markets for now," Menon said.

Overnight, Wall Street's main indexes notched record high

closes, with Tesla gaining around 9% after touching $1

trillion in market value on Friday on bets that the automaker

would benefit from CEO Elon Musk's backing of Trump.

Trump's victory and the election of pro-crypto candidates to

Congress have supercharged a bitcoin rally to record highs

closer to 90,000, and targeting $100,000 next. It was last at

$88,516.

"After such a performance, one could ask whether the Trump

trades are already played out? Our take is 'No', as we think

these trades still have plenty more legs," said Manish Kabra,

lead U.S. equities & multi-asset strategist at Societe Generale

in a note.

On the macro side, investor focus will be on U.S. consumer

price inflation data on Wednesday, with a parade of Federal

Reserve speakers also due to speak this week, including Fed

Chair Jerome Powell on Thursday.

Markets are pricing in 87% chance of the Fed cutting rates

in December by 25 basis points.

In commodities, oil prices slid as China's stimulus plan and

oversupply concerns took the wind out of markets in prior

sessions.

Brent crude futures was at $71.60 a barrel, down

0.32% while U.S. West Texas Intermediate crude futures

was 0.35% lower at $67.80 a barrel.

Spot gold was 0.5% lower at $2,606 per ounce,

touching its lowest level in a month.