Nov 04, V7N- Asian markets saw gains on Monday, driven by anticipation surrounding the tight U.S. presidential race, optimism over a potential Fed rate cut, and expectations for new economic stimulus measures in China. Positive momentum from Wall Street and weaker-than-expected U.S. jobs data boosted hopes that the Federal Reserve might announce a 25-basis-point rate cut following a larger 50-point reduction last month. With the U.S. election outcome too close to call, investors are eyeing any shifts that could indicate an edge for either Democratic candidate Kamala Harris or Republican Donald Trump.

The U.S. dollar weakened as a new poll in Iowa, a crucial swing state, showed Harris gaining an advantage. A Trump win is generally seen as dollar-positive, as his policies could potentially increase yields through tax cuts and tariffs on imports. Market watchers are also scrutinizing congressional races, as a Republican sweep across the presidency, House, and Senate could lead to significant fiscal changes, which may result in higher yields until markets stabilize, according to Esho Capital's Peter Esho.

China's leaders are also meeting this week to finalize a major stimulus package, expected to be influenced by the U.S. election result. Analysts suggest Beijing may approve approximately one trillion yuan ($140 billion) in additional funding, largely for debt-ridden local governments, along with another trillion yuan in support for banks to manage non-performing loans. The measures are anticipated by Friday, giving China time to adjust its response based on the U.S. election.

Markets across Asia responded positively to these developments, with strong performances in Hong Kong and Shanghai. Oil prices also rose over one percent following OPEC+’s decision to extend supply cuts amid concerns over demand. Geopolitical tensions added further support to oil prices, as Iran's leader issued a warning to Israel and the U.S. following recent conflicts.

Key Market Figures (as of 0230 GMT):

  • Hong Kong - Hang Seng Index: UP 0.2% at 20,546.35
  • Shanghai - Composite: UP 0.3% at 3,282.42
  • Tokyo - Nikkei 225: Closed for a holiday

Currencies:

  • Euro/dollar: UP at $1.0888
  • Pound/dollar: UP at $1.2975
  • Dollar/yen: DOWN at 151.79 yen

Oil Prices:

  • West Texas Intermediate (WTI): UP 1.5% at $70.50 per barrel
  • Brent North Sea Crude: UP 1.4% at $74.09 per barrel

END/BUS/RH/