Asian shares advanced Thursday after stocks rallied on Wall Street
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Asian shares advanced Thursday after stocks rallied on Wall Street

Asian stocks surged on Thursday following a spurt in shares on Wall Street as investors embodied the reverse of more gridlock in Washington, sending the S&P 500 index up 2.2%, while the US presidential election results remained limited.

Hong Kong’s benchmark led the region, gaining 2.4%, while stocks in Tokyo and South Korea also rose by more than 1%.

Overnight, the S&P 500 rose 2.2% for its best day in five months. The benchmark index was up by 3.5% before the market reduced its momentum by the end of the day.

The Nasdaq had its biggest gain in more than six months, as traders doubled down on technology stocks. Health insurers were also big winners, as prospects for the industry overhaul diminished.

The S&P 500 gained 74.42 points to open at 3,443.44 points. The Dow added 1.3% to 27,847.66. Nasdaq gained 3.9% to open at 11,590.78.

The Hang Seng in Hong Kong was at 25,483.08 in Asia on Thursday, while Tokyo’s Nikkei 225 index was at 15 TO 23,929.61 points. South Korea’s Kospi jumped 1.5% to 2,393.03. In Australia, the S&P / ASX 200 rose 0.8% to 6,112.90. The Shanghai Composite Index rose 0.6% to 3,297.34.

The futures of both the S&P 500 and the Dow Industrial were up 0.1%.

The fate of the US presidency is slim as neither President Donald Trump nor Democratic challenger Joe Biden garnered 270 electoral college votes to win on Thursday morning. But after an overnight session in global markets where Trump declared his victory ahead of time, the markets acted as if the White House living could be secondary.

“The White House and Congress cannot move beyond the truth of the elections given the uncertainties of the election amid the threat of a legal battle drawn for the Gridlok (Democrat House-Republican Senate Impass),” Mizaz Bank said in a comment. “Instead, the markets are happy to believe that this is a Democrat White. House and Republican Senate ‘Goldilocks’ result. In other words, a ‘Goldilocks gridlock.’ ”

With Republicans edging closer to retaining control of the Senate, the prospect increases the tax retard and stricter rules on businesses that investors expected if Democrats did an electoral sweep. A major stimulus effort to the economy that many economists and investors are insisting seems unlikely.

By making additional incentives less likely, a divided US government could force the Federal Reserve to do even more on its own to support the economy, which could send the dollar lower against the euro and other currencies.

The Fed is meeting this week and was due to announce its latest decision on the interest rate policy on Thursday. But the central bank may prohibit determining whether and how to extend the subsidy supplied through ultra-low interest rates until the final election results are confirmed.

Taking steps to reduce interest rates earlier this year has helped support the record and Wall Street since March. Now facing more pressure for such changes, Congress failed to provide any further assistance to struggling individuals and businesses.

Much of Wall Street’s rally Wednesday was driven by large gains for technology stocks that were seen as some safe bets in the market, as their profits also grow into an epidemic as online changes in daily life occur.

Microsoft grew 4.8%, Amazon climbed 6.3%, Facebook rose 8.3%, and Google’s parent company grew 6.1%.

Uber jumped 14.6% and the lift jumped 11.3% after ride-healing companies in California won, allowing them to classify their drivers as contractors rather than employees and maintain their business model.

Other sectors of the stock market, where profits are more dependent on the strength of the economy, lagged behind.

Some of the sharp markets move overnight resulted in yields for US government bonds, which had previously risen to raise expectations for large negative stimulus.

The 10-year Treasury yield rose from 0.88% to 0.94% late Tuesday as elections were closing. This was reduced to 0.75% after Trump’s premature claims of victory in several major states, with Senate seats falling short of expectations from Republicans and some economic reports. It stood at 0.74% at the beginning of Thursday.

It may take a few days for a White House winner to emerge, and professional investors say they are ready for sharp market swings in the meantime. The Trump campaign filed lawsuits over voting in Michigan and Pennsylvania on Wednesday, and the first president said he takes the election to the Supreme Court, though it is unclear what he meant by it.

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About Dwipen Gogoi

Dwipen Gogoi, MBA (IB and IT) and PGDFT from Pune. (Technical Analyst of AliceBlue) I am a You Tuber, Blogger and doing Technical Analysis last 10 years in Stock, Commodity and Forex Market. i am creating various trading strategies for day traders, swing traders, scalp traders.

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