Most Asian markets on Friday rose after the week’s strong gains, with traders upbeat as the chances of former US vice president Joe Biden winning the US election increased and after the US Federal Reserve indicated that it could provide further economic support.
While US President Donald Trump again accused the Democrats of committing voter fraud and his team launched a series of legal actions in various states, hopes a new stimulus package would eventually be passed were supporting sentiment.
Analysts said that Tuesday’s election was good for equities as the expected Democratic sweep of the US Congress failed to materialize, while Biden looked set to take the White House.
Photo: EPA-EFE
“The market reaction to the unfolding election news suggests that financial markets would prefer to see a constrained Biden presidency,” said Paul O’Connor, head of Multi Asset at Janus Henderson Investors.
However, “the economic backdrop to this election is one of an incomplete global recovery that remains threatened by the continued spread of COVID-19 in many major economies, as well as fast-fading fiscal support measures,” he added.
A Biden presidency and Republican US Senate would likely mean Democrats would not be able to push ahead with regulatory changes and tax hikes, which observers said were both good for stocks. While lawmakers are also expected to push through a new economic rescue package, it would not likely be as big as anything from a Democratic-led US Congress, which National Australia Bank analysts said would put the onus on the Fed next year.
The US central bank provided some cheer to traders after its policy meeting on Thursday, as it pledged to do all it could to support the world’s top economy.
Fed Chairman Jerome Powell said that more stimulus was “absolutely essential” to support the economy as the outlook was “extraordinarily uncertain,” but that other tools were available to the Fed.
“We can certainly look at new facilities” if the situation deteriorates, he told a news conference.
In Taipei, the TAIEX ended up 54.73 points, or 0.42 percent, at 12,973.53, after moving between 12,927,30, and 12,999.16. Turnover was NT$182.952 billion (US$6.34 billion).
It gained 3.4 percent over the week.
Tokyo’s benchmark Nikkei 225 index gained 0.91 percent or 219.95 points to close at 24,325.23, its highest level since November 1991. Over the week, the index rallied 5.87 percent.
The broader TOPIX closed up 0.52 percent or 8.55 points at 1,658.49, increasing 5.01 percent over the week.
Japanese indices started in negative territory, adjusting recent gains and reacting to a stronger yen against the US dollar.
“But investors later resumed bargain-hunting purchases on the backdrop of easing uncertainties over the US presidential election,” Okasan Online Securities said.
In Hong Kong, the Hang Seng Index gained 0.07 percent to close at 25,712.97, rising 6.66 percent from a week earlier.
The benchmark Shanghai Composite Index declined 0.24 percent to 3,312.16, but gained 2.72 percent for the week.
South Korea’s KOSPI rose 0.11 percent to 2,416.5, increasing 6.59 percent from a week earlier, while Australia’s S&P/ASX 200 gained 0.82 percent to 6,190.2 and rose 4.43 percent for the week.
Additional reporting by AFP and CNA, with staff writer
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