Biden’s Win Boosts Global Stock Markets As Japanese Stocks Soar to a 29-Year High | Deal

Financial markets around the world have received a marked boost in the wake of Joe Biden’s victory in the US presidential election, Japanese stocks hit their highest level in nearly three decades, and oil prices also rose.

Stock prices in Europe and New York were also expected to rise sharply on Monday after the president-elect vowed to try to bring unity to the United States after four tumultuous years under the Trump administration.

The Nikkei index in Tokyo led the way with a 2.12% gain at the close, as Asia Pacific traders had their first opportunity to deliver their verdict on Biden’s victory declared over the weekend.

In China, the Shanghai Composite rose nearly 2%, Hong Kong shares rose 1.5% and the Sydney ASX200 finished 1.74% higher.

Futures trading suggested that the FTSE100 will soar 1.3% in the opening bell on Monday, while the S & P500 is set to gain 1.5% and the tech-savvy Nasdaq futures rose more. Of 2%.

Investors seemed to be betting that Biden will likely find himself out of control over the Senate and therefore will not be able to push through any significant fiscal stimulus, which in turn will force the US Federal Reserve to continue pumping cheap money. to the economy and keep borrowing costs at their historical level. low levels.

“While a lot of attention was paid to Trump vs Biden, markets have reacted strongly to the (likely) divided Congress, which means more confidence that interest rates will be lower for longer,” said Dave Wang, portfolio manager. of Nuveen Capital in Singapore.

Damien Klassen of Nucleus Wealth in Melbourne said the market reaction had still been “a bit strange” given the prospect that the new president would be affected.

And despite a flood of money in the markets due to latent demand, Klassen believes the outlook for the world economy was still worrying because it was so reliant on government stimulus.

“The fundamentals still look terrible,” he said. “And it is worse given that the virus is spreading through America and Europe. Hospitalizations are increasing and when people start dying in the hallways is when ordinary people stop doing things. “

“So the fundamentals aren’t looking good and how long can markets ignore that?”

The United States saw a record number of new coronavirus infections last week, with a total number of cases close to 10 million.

Matt Sherwood of Australian fund manager Perpetual was also skeptical, arguing that Biden’s victory did not necessarily justify a reversal of his investments.

“In the end, we think the US economy is still quite fragile and growth is slowing down,” Sherwood said.

However, oil prices rose on Monday, ignoring concerns about weak demand amid rising coronavirus cases globally. A barrel of benchmark Brent crude added $ 1 to $ 40.48.

Although some analysts believed that a multi-trillion dollar fiscal stimulus plan focused on much-needed infrastructure projects in the US was still possible despite a divided government, the spotlight would shift back to the Fed.

As a result, the US dollar has weakened in recent days, while growth indicators such as the Australian dollar have rebounded with the Biden presidency deemed less likely to be a trade showdown. The Australian dollar was up 0.2%, having risen 3.3% last week and the pound was up 0.3% at $ 1.32.

The US dollar index measured against a basket of leading currencies fell slightly to 92.19. In May it rose 10 points.

Investors will also focus on the British pound and the euro this week, and trade talks between the UK and the EU will come to a head with the EU summit on November 15.

Later that day, the Bank of England’s chief economist will deliver a speech on “The economic impact of the coronavirus and the long-term implications for the UK.”