Asian Shares Flat on Investor Caution Over U.S. Election Race
08 November 2016 - 3:20PM
Dow Jones News
Asian equity markets were mostly flat early Tuesday ahead of the
U.S. presidential election, as investors remained cautious over the
close race between Hillary Clinton and Donald Trump.
Some investors have said that a win by Mrs. Clinton could leave
markets relatively calm, with investors generally preferring the
Democratic nominee because of her perceived predictability on
economic policies. However, her lead in the polls have been
narrowing.
"I think we have seen all of the upsides from Sunday's news,"
said Alex Furber, a sales trader at CMC Markets, referring to the
decision by the Federal Bureau of Investigation not to pursue
charges against Mrs. Clinton on her use of a private email
server.
Mr. Furber expects a broad-based selloff in markets and a shift
from risky assets if Mr. Trump wins the election.
Stocks in Asia initially opened higher to track Wall Street's
overnight strength, but several key markets soon reversed into
negative territory. Japan's Nikkei Stock Average gave up earlier
gains of 0.3% and was last down 0.2%, while Australia's S&P/ASX
200 fell 0.1% and Korea's Kospi was flat.
In the U.S., by contrast, the S&P 500 on Monday made its
biggest gain since March, closing 2.2% higher and the Dow Jones
Industrial Average gained 2.1%.
The Nikkei fell Tuesday despite a 0.1% gain in the U.S. dollar
against the Japanese yen. A weaker yen makes Japanese exports more
competitive and improves corporate profitability.
Shares of life insurers and banks benefited from higher,
long-term government bond yields in the U.S. and Japan. Dai-ichi
Life Holdings was up 1.3%, while T&D Holdings rose 1.9%,
Sumitomo Mitsui Financial Group gained 0.6% and Nomura added
0.4%.
Prices for Brent crude, the international oil benchmark, rose on
reports that Russia signaled it would take part in a deal with
members of the Organization of the Petroleum Exporting Countries to
cut production. Brent was last up 0.2% at $46.25 a barrel in
morning Asian trade, though Nymex futures were flat.
Commodity prices also rose amid increased hopes of a victory for
Mrs. Clinton. In Australia, BHP Billiton rose 2.6% and Rio Tinto
added 1.7%. Woodside Petroleum and Oil Search were up by 1.2% and
1.4%, respectively, following gains in crude oil prices.
Stocks in Greater China were higher, though the markets have
been stuck in range-bound trade for several sessions. Hong Kong's
Hang Seng Index was up 0.3% and the Shanghai Composite Index added
0.2%.
Tuesday's equity market performance in Asia contrasted with
Monday's strong buying momentum, though the gains in the previous
session were mainly due to traders covering their short positions,
Chris Weston, chief market strategist at broker IG, said.
"Clients are overwhelmingly asking how much can you trust the
polls" for the U.S. election, he said. "Everyone has been burned
before," he said, referring to the shock outcome of the Brexit vote
in June.
Kosaku Narioka and Jenny Hsu contributed to this article.
Write to Kenan Machado at kenan.machado@wsj.com
(END) Dow Jones Newswires
November 07, 2016 23:05 ET (04:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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