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Global equities rocked by Trump travel ban

New York -World stocks were spooked on Monday by Donald Trump's controversial travel ban, which some dealers said may be an early taste of coming turmoil prompted by the US president.

Asian and European equities kicked off the downward spiral and were joined by Wall Street, with the Dow index waving goodbye to the 20,000-point milestone level it breached for the first time last week.

Markets were "on the back foot after US President Trump announced one of his most radical policies yet, in the form of a travel ban," said CMC Markets analyst Michael Hewson.

Investors are beginning to lose confidence in Trump's ability "not to cause damage to the US economy," he said.

Jack Ablin, chief investment officer at BMO Private Bank, said he was unwilling to write off all of the market's optimism generated by Trump's win, but said there was a need for a greater "balance" in reading the outlook under the new administration.

The surge in US markets after Trump's election was due to hopes he and congressional Republicans would enact tax cuts and other pro-growth measures.

"Going into the inauguration, expectations were running very high," Ablin said.

"I don't think one day's move necessarily turns the tide around on the Trump trade," Ablin said. "But investors have to take the good with the bad and it's not going to be all good."

Equity markets in London, Paris and Frankfurt all lost about 1%. The Dow was down 1.1% early in the session, but finished at 19 971.13, down 0.6%.

'Trump Trade becoming Trump Fade?'

The newly-installed US president late on Friday signed an executive order banning entry to travellers from seven Muslim-majority countries and imposing a temporary ban on refugees.

The move was met with widespread outrage from world leaders, and protests at US airports nationwide.

There was "an air of caution" on stock markets which had seen major rallies after Trump's election based on fiscal promises, noted Jameel Ahmad, an analyst at FXTM.

Boris Schlossberg of BK Asset Management said worries about Trump are starting to weigh.

"The Trump Trade which was based on the notion of quick deregulation, enhanced spending on infrastructure and the promise of much faster economic growth is in danger of being turned into a Trump Fade," Schlossberg said.

Others said the controversy could push back the time frame for tax cuts and other measures craved by Wall Street.

"There's a chance that some things everyone would like to see accomplished might take longer," said Art Hogan, chief market strategist at Wunderlich Securities.

Markets have shown resilience despite a series of controversial moves by Trump in his first week in office, including a row with Mexico over trade and his proposed border wall, and battles with the media over the crowd size at his inauguration and unsupported assertions that millions of people voted illegally in the 2016 election.

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