Global markets rose Monday, with weekend confirmation that Democrat Joe Biden had won the presidency giving investors fresh impetus to push stocks higher.
The continuation of last week’s rally in part reflected reduced uncertainty—as the election looked largely resolved—combined with expectations that a divided government would result in modest policy measures on taxes and spending.
On Saturday, the Associated Press said the former vice president had garnered enough electoral college votes to win, and on Sunday Mr. Biden forged ahead with his transition to the White House, charting a course for significant policy changes even as President Trumpdeclined to concede the race.
By early afternoon Hong Kong time, S&P 500 futures had gained 1.8%, while Nasdaq-100 futures advanced 2.7%. Regional markets in Asia also rallied, with benchmarks in Japan, South Korea, India and Taiwan hitting multi-year or record highs.
“The market is cheering about more certainty and hopefully less volatility with Biden winning,” said Ken Wong, a portfolio manager at Eastspring Investments. Investors were also positive about the prospect of the Republicans likely retaining control of the Senate, which could limit the Democrats’ ability to introduce major initiatives such as rolling back tax cuts, Mr. Wong said.
Tai Hui, chief market strategist for Asia at J.P. Morgan Asset Management, said the region would benefit as higher trade tariffs became less likely. “A lot of the shocks we’ve experienced in the past three years will be less of a concern. And investors will welcome that,” he said.
China’s Shanghai Composite Index added 2% and Hong 6.56 per U.S. dollar in the offshore market, trading at its strongest levels in more than two years.
“The consensus is that Biden will be easier on trade and foreign policy, unlike Trump who is more erratic and aggressive,” said Colin Low, senior macro analyst at FSMOne.com in Singapore. “This benefits Chinese stocks, and it can be seen from the cyclical sector, which has been rising faster than the other sectors in recent days.”
Mr. Low said technology stocks also rallied, partly because investors expected Mr. Biden to give Chinese tech an easier time. U.S. tech giants have also surged in recent days. In Hong Kong,
Tencent Holdings Ltd.
stood 1.8% higher, after earlier hitting a record intraday high and
Japan’s Nikkei 225 gained 2.2%, putting it on course for a fresh 29-year high, after it closed Friday at its highest point since 1991. Car makers
Honda Motor Co.
Mazda Motor Corp.
Toyota Motor Corp.
were among the biggest gainers.
The dollar weakened against currencies including the British pound and the Australian dollar. The WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, dropped 0.2% to 87.01, its lowest since June 2018.
“Globally, investors are just happy to turn the page on the U.S. elections,” said Eli Lee, head of investment strategy at Bank of Singapore. Mr. Lee said the feared scenario of a drawn-out contested election had diminished, reducing uncertainty for markets and for policy makers such as the Federal Reserve.
“The Fed has been on the back foot for the past couple of months as it wants clarity on what policies would be on the fiscal front to craft monetary policies to support the economic recovery,” he said.
Last week, key U.S. indexes rose the most since April.
The yield on the 10-year U.S. Treasury fell slightly to 0.813%. Brent crude, the global oil benchmark, rose 2.6% to $40.46 a barrel.
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