Shares rally ahead of U.S. election, dollar steady

In this news, we discuss the Shares rally ahead of U.S. election, dollar steady.

SINGAPORE (Reuters) – Asian stock markets rallied on Tuesday as investors were supported by strong factory output data from major economies, while the dollar and gold were little changed ahead of the U.S. election.

Elsewhere, S&P 500 ESc1 futures rose 0.5%, EUROSTOXX 50 STXEc1 futures rose 0.8%, and FTSE FFIc1 futures gained 0.9%, indicating a strong market opening. , although many market participants expect volatility in the short term, especially after a hectic week.

President Donald Trump and his Democratic rival Joe Biden made a final push to secure votes in battlefield states on Monday as their campaigns braced for post-election legal disputes that could delay a clear outcome.

“We all hate uncertainties. We all want the feeling of risk to improve. So we all hope for a clear and undisputed winner in the presidential election, ”said Song Seng Wun, economist at CIMB Private Banking.

The largest MSCI index of Asia-Pacific stocks outside of Japan .MIAPJ0000PUS added 1.2%, up for the second consecutive session. The indicator is just 1% shy of a 2-1 / 2 year high reached in mid-October and up 5% so far this year.

Strategists at the Blackrock Investment Institute said polls suggested a greater likelihood of a Democratic sweep in the election.

“We are starting to incorporate themes that we believe would outperform in this event, moving towards a more pro-risk stance overall despite the market pullback last week,” the strategists said in a report.

The main South Korea .KSII index rose 1.7%, the Hong Kong .HSI index sprinted 2.2% higher and the Chinese blue chip .CSI300 rose 0.8%. Japanese markets were closed for holidays.

“We are improving the overweight in Asian non-Japan equities and Asian fixed income as China and other Asian economies have been more successful in containing COVID-19 and are further along in the economic recovery,” said the BlackRock Investment Institute. “We expect this momentum to continue over the coming months.”

The data showed that economic activity was improving across the board.

Manufacturing activity in the United States accelerated more than expected in October, with new orders reaching their highest level in almost 17 years, while Chinese factory activity grew fastest in a decade and that manufacturing in the euro zone also accelerated.

Analysts said the prospect of not immediately winning the presidential race was the biggest drag on markets. Trump is following Biden in national opinion polls, but polls in the swing states that will decide the election show a closer race.

“Senate oversight is crucial for any ‘blue wave’ scenario to materialize, otherwise the divided government continues and expectations for fiscal stimulus will have to be scaled back,” said Alvin Tan, Forex strategist for the Asia at RBC Capital Markets.

The US dollar hovered just below a one-month high. Against a basket of currencies = USD, it held at 93.996. The security yen JPY = was stable at 104.72 yen to the dollar.[FRX/]

The Australian [AUD=D3] fell 0.2% and Australia’s ASX 200 .AXJO finished up 2% as the country’s central bank cut interest rates to near zero and expanded its bond buying program, as expected.

Oil prices have stabilized after two weeks of weakness, with Brent LCOc1 futures down 0.2% to $ 38.89 a barrel, but hanging on for most of an overnight rebound. [O/R]

Yet the uncertainty of the U.S. election and a resurgence of COVID-19 cases in Europe and the United States have supported the price of the dollar and gold, with some investors seeking safety.

Gold XAU = fell 0.1% to $ 1,892.5 an ounce, while the dollar index = USD held at 94.027.

Investors are bracing for a hectic week with central bank, Federal Reserve and Bank of England meetings, as well as the release of US employment data for October.

Chart: 2020 asset performance here

Chart: World exchange rates in 2020 here

Reporting by Anshuman Daga; Editing by Lincoln Feast

Original © Thomson Reuters

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