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Asian shares, US futures surge on relief US election decided

Asian shares, US futures surge on relief US election decided

Asian shares, US futures surge on relief US election decided

People walk past a bank's electronic board showing the Hong Kong share index at Hong Kong Stock Exchange, Nov 9, 2020. (Photo: AP/Vincent Yu)

TOKYO: Asian shares and US futures rose on Monday (Nov 9) on relief the US presidential election results were finally decided, with Joe Biden the president-elect.

Strong Chinese trade data released over the weekend also helped. Many in the region expect trade tensions to de-escalate under a Biden presidency, a plus for Asian markets and economies.

READ: Biden win opens door for improved predictability in China-US relations: Chinese state media

The MSCI world equity index , which tracks shares in 49 countries, rose 0.5 per cent to a record high in early European hours. On Friday, it posted its biggest one-week gain in nearly seven months.

E-mini futures for the S&P 500 jumped more than 1.4 per cent on Monday. Nasdaq futures rallied more than 2 per cent to just under a record high, signalling a positive start for US markets.

MSCI's broadest index of Asia Pacific shares outside of Japan jumped 1.3 per cent after hitting its highest since January 2018. The pan-Europe STOXX 600 climbed 1.5 per cent to one-month highs by 8.46am (GMT).

Japan's Nikkei 225 surged 2.12 per cent, Australia's S&P/ASX 200 added 1.75 per cent, South Korea's Kospi added 1.27 per cent, Hong Kong's Hang Seng rose 1.18 per cent, while the Shanghai Composite gained 1.86 per cent. The Singapore Straits Times Index rose 1.19 per cent.

"Why the excitement? Hopes of less diplomatic and trade angst, a lower dollar helps global rebalancing," Chris Bailey, European strategist at Raymond James in London said in a note. "A lot of hope ... but over two months until inauguration day!"

Oil prices jumped on Monday as investors greeted the prospect of a Biden victory, shrugging off worries about lacklustre demand amid rising global coronavirus cases. Oil prices rose more than 2 per cent, with Brent futures topping US$40 a barrel.

Analysts said the outlook might get tougher from here as investors focus on Biden's ability to expand fiscal stimulus and measures to reduce the spread of COVID-19.

As votes gradually were counted in the closely watched US presidential election, Biden crossed the winning threshold of 270 Electoral College votes with a win in Pennsylvania.

However, President Donald Trump’s refusal to concede and threats of legal action remain a cause for uncertainty.

READ: Top US Republican urges Trump to 'fight hard'

"Asia markets can be seen cheering the elimination of some of the uncertainties with the US presidential election outcome wait put to an end," said Jingyi Pan, senior market strategist at IG in Singapore.

If Congress is split between a Democratic-controlled House and a Republican-controlled Senate, it might be difficult for Biden to raise taxes. That remains to be seen, with two run-off votes in the state of Georgia remaining. Currently, the two parties each hold 48 seats in the 100-seat Senate.

A divided legislature also is expected to temper any pushback against deregulation, prolonging Trump's relatively business-friendly policies.

READ: US becomes first nation to cross 10 million COVID-19 cases as third wave of infections surges

Customs data released on Saturday showed China's export growth accelerated in October, boosting the total so far this year back above pre-coronavirus levels for the first time.

Exports in October rose 11.4 per cent over a year earlier to US$237.2 billion, up from September's 9.9 per cent gain, while imports rose 4.7 per cent by value to US$178.7 billion, decelerating from the previous month's 13.2 per cent surge.

 

Source: AGENCIES/dv

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