Global stocks, dollar gain as unclear U.S. election thwarts Democratic sweep
By Herbert Lash and Marc Jones NEW YORK/LONDON (Reuters) - The dollar rose and world equity markets rallied on Wednesday as investors bet a progressive 'Blue Wave' Democratic agenda of heavy fiscal spending and more regulation was unlikely amid an unclear outcome following the U.S. presidential election
By Herbert Lash and Marc Jones
NEW YORK/LONDON (Reuters) - The dollar rose and world equity markets rallied on Wednesday as investors bet a progressive "Blue Wave" Democratic agenda of heavy fiscal spending and more regulation was unlikely amid an unclear outcome following the U.S. presidential election.
The dollar jumped more than 1% after President Donald Trump won Florida early in the day as investors grasped that Democratic Party control of Congress was not in the cards even if former vice president Joe Biden wins the presidential race.
Biden extended his narrow lead in Michigan while maintaining a slight edge in Wisconsin, according to Edison Research.
Trump, who falsely claimed victory and made unsubstantiated allegations of electoral fraud, won the two pivotal battleground states in 2016.
Officials from each campaign insisted their candidate would prevail in the fight for 270 Electoral College votes needed to win the White House.
But Republicans were likely to retain control of the Senate and effectively halt any major change in taxes, regulation or spending.
Growth stocks pushed the major indexes on Wall Street sharply higher on the notion that a divided Congress would curb efforts to tax the big U.S. technology heavyweights.
"That decisive Blue Wave doesn't look like it's going to happen, and I think that markets are comfortable, perhaps, even if Biden wins," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
"Investors have headed back to their security blankets," he said. "Reliable growth technology companies, 10-year Treasuries are rallying, a pivot toward safety and the U.S. dollar."
MSCI's benchmark for global equity markets <.MIWD00000PUS> rose 2.44% to 581.97, while the pan-European FTSEurofirst 300 index <.FTEU3> closed up 2.1% at 1406.62.
On Wall Street, the Dow Jones Industrial Average <.DJI> rose 2.58%, the S&P 500 <.SPX> gained 3.11% and the Nasdaq Composite <.IXIC> added 4.14%.
But the dollar will weaken next year as a divided Congress will likely force the Federal Rerve to do more in the coming months to help the economy to recover, said Edward Moya, senior market analyst at OANDA in New York.
"You're probably going to see that the dollar decline will still take place, it just won't be as accelerated as with what would have happened with a blue wave," he said.
The dollar index <=USD> rose 0.397%, with the euro
Long-dated U.S. Treasury yields, which had climbed to multi-month highs ahead of the election results, plummeted when the likelihood of a Democratic sweep that had been priced into the market faded.
Yields on the benchmark 10-year U.S. Treasury
Stéphane Monier, chief investment officer at Lombard Odier, said a divided Congress would have "far-reaching implications for markets, mostly because it means that any kind of pandemic recovery package is still tough to approve".
TOO CLOSE TO CALL
In Asia, Japan's Nikkei <.N225> finished 1.7% higher, while MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> edged up 0.4%.
Chinese blue chips <.CSI300> rose 0.7%, with markets uncertain how Sino-U.S. relations would develop.
Emerging market currencies pinballed. The Mexican peso
(GRAPHIC: World stocks market cap rise over last four years - https://fingfx.thomsonreuters.com/gfx/mkt/bdwpkjmoovm/Pasted%20image%201604323646730.png)
Gold had been buoyed by the extensive liquidity but ran into profit-taking, losing as much 1% to $1,887 an ounce.
Spot gold prices
Oil prices rose more than 3%, lifted in part as data showed a large decline in U.S. crude inventories.
Brent crude futures
(GRAPHIC: Global markets since Trump's election - https://fingfx.thomsonreuters.com/gfx/mkt/jbyprxazdpe/Pasted%20image%201604321715307.png)
(Reporting by Herbert Lash, Additional reporting by Mike Dolan and Sujata Rao in London; Editing by Bernadette Baum)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
By Howard Schneider WASHINGTON (Reuters) - The explosive surge in U.S. coronavirus cases this fall has left a question hanging: When will the economy take its own turn for the worse
FRANKFURT/WASHINGTON (Reuters) - The heads of the Federal Reserve and the European Central Bank welcomed the encouraging results in trials of a vaccine candidate for the novel coronavirus but stressed that the economic outlook will remain uncertain. Fed chair Jay Powell and ECB President Christine Lagarde said the economy was still in for a tough time even if the development of a potential vaccine by U.S. drugmaker Pfizer and German partner BioNTech SE was reason for some optimism further ahead
By Sumita Layek (Reuters) - India's fuel consumption in October registered its first year-on-year increase since February, as slowing coronavirus cases and increased mobility accelerated an economic recovery, data showed on Thursday.