Nov 07, V7N- Asian equity markets presented a mixed performance on Thursday, as investors responded to uncertainties surrounding the potential economic impacts of Donald Trump's election win and upcoming monetary policy decisions from major central banks, including the U.S. Federal Reserve. 
 
The possibility of a Republican-led U.S. government ushering in substantial fiscal spending lifted all three major U.S. stock indexes to new highs, but Asia saw less pronounced gains. Japan’s Nikkei 225 initially rose but reversed to a 0.44% decline, largely affected by rising U.S. Treasury yields. This increase in yields, spurred by concerns over higher deficits, strengthened the dollar and weighed on tech stocks, though it supported Japanese financials like banks and insurers. Meanwhile, South Korea’s Kospi index fell slightly by 0.14%, and Australia’s ASX 200 dipped 0.24%, affected by weakening gold stocks as the dollar gained strength.
 
Chinese stocks rebounded after a drop on Wednesday, with Hong Kong’s Hang Seng rising 0.49% and the mainland’s CSI 300 up 0.14%. The rebound followed strong export growth in October, as Chinese manufacturers rushed shipments to the U.S. and EU, anticipating potential tariffs under Trump. Market participants are closely watching the ongoing National People’s Congress Standing Committee meeting, which may reveal new stimulus measures.
 
In Europe, investors remained cautious. The euro continued to feel pressure, stabilizing at $1.0733 after a 1.82% drop on Wednesday following German Chancellor Olaf Scholz’s decision to dismiss Finance Minister Christian Lindner, which disrupted Germany’s coalition government. STOXX 50 futures inched down 0.04%, while Germany’s DAX futures gained 0.1%, showing mixed sentiments in European markets.
 
Currency markets reflected similar caution. The U.S. dollar index held steady after its strongest one-day rise in over two years, largely due to expectations of inflation from Trump’s proposed tariffs and immigration policies, which could temper the Fed’s expected rate cut. Sterling rose modestly ahead of the Bank of England’s anticipated rate cut, while Sweden’s Riksbank and Norway’s central bank are expected to announce decisions soon.
 
In commodities, gold prices dipped further, pressured by dollar strength, while crude oil prices saw modest gains, supported by supply risks amid U.S. policy uncertainty and a hurricane threat in the Gulf Coast. Bitcoin, after reaching a record high, eased slightly to $75,200, with markets viewing Trump as a cryptocurrency supporter. 
 
Overall, market movements reflected an ongoing balancing act between short-term inflation risks and the potential for slower growth due to tariffs and other U.S. economic policies under Trump’s administration.
END/BUS/RH/