TOKYO (REUTERS) – Asian stocks were mixed on Wednesday (Jan 6) as investors anxiously awaited results of the United States run-off elections that would determine the legislative balance of power in the world’s largest economy, while oil prices rose on news of planned output cuts.
Adding to broader uncertainty in markets was the latest twist in a regulatory saga over whether the New York Stock Exchange (NYSE) would delist three Chinese telecom giants on security grounds.
The Shanghai SE Composite Index rose 0.73 per cent on Tuesday after the NYSE said it would not delist the companies. However, a person familiar with the matter later said the market operator would restart delisting plans.
In Asia, futures for the S&P 500 fell 0.07 per cent, Australian S&P/ASX 200 dipped 0.43 per cent and Japan’s Nikkei 225 inched up 0.1 per cent.
Singapore’s Straits Times Index was up 0.1 per cent at 9.07am local time.
In the US, the tense run-off elections in the state of Georgia will decide whether President-elect Joe Biden will have the majority in the Senate he needs to support his agenda, or if he will face gridlock in the early stages of his term.
Results are due on Wednesday morning and analysts say Wall Street is likely set for a rally if Republicans win and a dip if Democrats gain control. Exit poll data on Tuesday suggested extremely tight contests.
“A market pull-back seems both reasonable and healthy. But stocks won’t plunge to zero because there is a countervailing positive here,” said Phil Orlando, Chief Equity Market Strategist, Federated Hermes of a potential Democratic sweep.
“A Biden honeymoon with Democratic Congress helmed by Nancy Pelosi and Charles Schumer would likely lead to more fiscal stimulus and infrastructure spending. That would serve as a temporary sugar high for stocks in 2021 before the bill comes due in 2022.”
Bucking the trend in Asia, South Korea’s main Kospi index surpassed 3,000 for the first time, as investors looked towards a broad recovery in exports.
Wall Street trimmed earlier gains on Tuesday as political uncertainty and the discovery of a more contagious variant of the coronavirus in major hubs like New York City tempered bullishness about the vaccine roll out.
The Dow Jones Industrial Average rose 0.55 per cent, the S&P 500 gained 0.71 per cent and the Nasdaq Composite added 0.95 per cent.
MSCI’s gauge of stocks across the globe gained 0.06 per cent.
Emerging market stocks rose 1.19 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.04 per cent higher, while Japan’s Nikkei per cent.
US crude futures climbed 4.9 per cent on Tuesday settling at US$49.93 a barrel after Saudi Arabia pledged additional, voluntary oil output cuts. Brent crude futures also jumped 4.9 per cent, settling at US$53.60.
The dollar index fell 0.433 per cent, against a basket of major currencies following China’s decision to lift its official yuan exchange rate by its highest margin since it abandoned a dollar peg in 2005.
The benchmark US 10-year notes last fell 12/32 in price to yield 0.9549 per cent, from 0.917 per cent late on Monday.
Bitcoin traded at US$34,077.96, up 6.41 per cent.
Spot gold added 0.4 per cent to US$1,949.46 an ounce.