Global stocks jumped on the day of the US presidential election, as polling favoured Democratic candidate Joe Biden to defeat Republican incumbent, Donald Trump.
Hong Kong’s Hang Seng index gained 2.3 per cent on Tuesday and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks rose 1.2 per cent. South Korea’s Kospi added 1.9 per cent, while Japan’s markets were closed for a public holiday.
A Financial Times poll tracker shows Mr Biden has an advantage over Mr Trump, polling ahead by about eight points in a composite of national surveys.
The Democratic hopeful is also leading the incumbent in key states, but his lead has narrowed in some areas since summer.
That has boosted analysts’ expectations that Mr Biden could take the White House and unleash a large-scale government spending programme that could offset the economic blow to the US from the coronavirus.
“The equity market appears to be pricing in the increased odds of a Biden win and a blue wave,” said Hong Li, head of US equity quantitative strategy at Citigroup, referring to the possibility that Democrats could take the presidency and both houses of Congress.
“Timely and clear election results will remove one of the two major risks for the equity market and may bring a clearer picture of the potential stimulus package,” he added.
“Market participants are ramping up their conviction of Biden’s victory,” said Ken Cheung, a strategist at Mizuho Bank in Hong Kong, adding that polls suggested the Democratic candidate’s lead was larger than Hillary Clinton’s four year ago. “It would be more difficult for Trump to make a surprise victory this time.”
Futures for Wall Street’s blue-chip S&P 500 were 0.6 per cent higher on Tuesday, while those for London’s FTSE 100 added 0.9 per cent. Low trading volumes for these contracts can exacerbate volatility during Asian trading. The S&P 500 rose 1.2 per cent on Monday.
China’s onshore-traded renminbi was little changed at Rmb6.6912 a dollar. The Chinese currency has strengthened in recent weeks on rising expectations of a victory for Mr Biden and hopes of a reduction in trade tensions between Washington and Beijing.
However, analysts have warned of potential volatility tied to the election. A surge in early voting could lead to days or even weeks of uncertainty over the election’s winner as officials strain to tally the results.
“We expect numerous litigation battles, particularly if the race is tight,” said Tom Kenny, senior international economist at ANZ.
