Yahoo Finance Asian Stocks Up, Boosted by Biden Win in U.S. Elections
By Gina Lee
Investing.com – Asia Pacific stocks were up on Monday morning in Asia, continuing their gains as Democrat Joe Biden cinched victory in the state of Pennsylvania on Sunday, winning the U.S. presidential election against incumbent president Donald Trump.
Biden now has the 270 electoral votes with the Pennsylvania victory, Trump is refusing to concede and continuing with legal actions to contest the election results. However, stocks rose in Asia heading towards their best week since April, with increased investor risk appetite leading to gains of more than 7%.
“Markets will probably judge this as no longer a contested election, that a delay even of the election result is not there either … the first order of business Monday morning will really be about reassessing what the policy will be under a Biden presidency in terms of domestic and foreign policy,” Ben Emons, managing director of global macro strategy at Medley Global Advisors, told Bloomberg.
Some investors struck a more cautious note, including Perpetual’s Matt Sherwood who said Biden’s victory would not necessarily warrant a tweaking of his portfolio.
“In the end, we think the U.S. economy is still fairly fragile and growth’s slowing down. You could potentially gravitate your portfolio more towards higher-beta type markets, such as emerging markets, and there is potential for better prospects in the energy space than would have been the case with a Democrat clean sweep,” he added.
The incessant rise of COVID-19 cases also dampened the mood. The number of cases in the U.S. is close to topping 10 million, with over 50 million cases reported worldwide as of Nov. 9, according to Johns Hopkins University data. With over 126,000 daily new cases reported for a third consecutive day in the U.S., investors’ focus will remain on the global economic recovery.
Biden is currently preparing a plan to curb the number of cases as part of the transition effort and will announce his COVID-19 task force later in the day.
Also on investors’ minds is whether the U.S. will pass the latest stimulus measures, and in what form, with four races for the Senate yet to be called and uncertainty over which party has the majority.
“While we remain positive over the intermediate term outlook and believe divided government reduces the chances of a bear case scenario playing out, we would refrain from unbridled enthusiasm at current levels,” Confluence Financial Partners wealth manager Jim Wilding told Reuters.
Should a divided Senate emerge, it would create more work for the Federal Reserve as the Democrat agenda on taxes or regulations is thwarted.
Dallas Fed President Robert Kaplan is also due to speak later in the day, with the central bank announcing the continuation of a soft monetary policy during the previous week. Across the Atlantic, Bank of England Governor Andrew Bailey and chief economist Andy Haldane are due to speak later in the day, with the speeches expected to be monitored closely over the prospect of negative rates.
China’s Shanghai Composite gained 1.83% by 11:21 PM ET (3:21 AM GMT) and the Shenzhen Component rose 1.90%. Trade data for October released earlier in the day showed that exports rose 11.45 year-on-year and the trade balance rose to 58.44 billion, both surpassing forecast figures prepared by Investing.com. However, imports grew 4.9%, down from the predicted growth of 9.5% and September's 13.2% reading.
Further data, including the Consumer Price Index, is due to be released tomorrow.
Hong Kong’s Hang Seng Index gained by 1.35%.
Japan’s Nikkei 225 jumped 2.16% and South Korea’s KOSPI was up 1.27%
In Australia, the ASX 200 rose 1.69%.
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