Global Shares Advance on Stimulus, Biden Victory Hopes

Asian shares inched towards 2-1/2-year highs on Friday as revived hopes for a U.S. stimulus deal eclipsed weaker-than-expected jobs data, while mainland Chinese markets jumped after a week-long holiday, Reuters informed.

Investors were also increasingly expecting the Democrats to take back the White House, and possibly the Senate as well, in the Nov. 3 U.S. election, analysts said.

A widening lead for Democratic presidential candidate Joe Biden is seen as reducing the risk of a contested election and opening the way for a big economic stimulus, helping to counter investors’ wariness about a Democrat pledge to hike corporate tax rates.

European shares are expected to open higher with Euro Stoxx50 futures rising 0.1% in early trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.34%, inching closer to its Aug. 31 peak, which was its highest level since March 2018. China’s CSI300 index gained 3.17% after the Golden Week holidays.

Futures for the S&P 500 gained 0.39% but Japan’s Nikkei bucked the trend to fall 0.12% after hitting a 7 1/2-month high.

“Markets are starting to assume a Biden victory,” said Osamu Takashima, chief FX strategist at Citigroup Global Markets Japan.

U.S. President Donald Trump on Thursday said talks with Congress had restarted on targeted fiscal relief, after calling off negotiations earlier this week.

House of Representatives Speaker Nancy Pelosi expressed confidence about reaching an agreement on the amount of aid in new legislation.

On Wall Street, the S&P 500 gained 0.80% and the Nasdaq Composite added 0.5%.

The S&P 500 energy index led sector percentage gains, rising 3.8% on the day, after a jump in oil prices due to production shutdowns ahead of a storm in the U.S. Gulf of Mexico and the possibility of supply cuts from Saudi Arabia and Norway.

Still, in a sign markets are pricing in a victory by Biden, clean energy-related shares have outperformed in recent weeks.

The iShares Global Clean Energy ETF has gained 14% so far this month, compared to 4% gains in energy shares.

“Biden seems to have a clear lead following the TV debate and a coronavirus cluster in the White House, which has raised questions about Trump’s crisis management capabilities,” said Mutsumi Kagawa, chief global strategist at Rakuten Securities.

A new Reuters/Ipsos poll found Americans are steadily losing confidence in Trump’s handling of the coronavirus pandemic, with his net approval on the issue that has dominated the U.S. election hitting a record low.

Be the first to comment

Leave a Reply

Your email address will not be published.


*