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Stocks in the Asia-Pacific region surged on Monday as investors’ response to Democrat bet Joe Biden’s win against Donald Trump in the U.S. presidential elections.
With 270 electoral votes, including the Pennsylvania victory, Biden has been declared the U.S. president-elect. Donald Trump hasn’t conceded and will push through with legal actions regarding the elections’ results. With this, the stocks in the Asia-Pacific region rose to their all-time high since April, with a higher investor risk appetite and gains of more than 7%.
“Markets will probably judge this as no longer a contested election, that a delay even of the election result is not there either … the first order of business Monday morning will really be about reassessing what the policy will be under a Biden presidency in terms of domestic and foreign policy… In the end, we think the U.S. economy is still fairly fragile, and growth’s slowing down. You could potentially gravitate your portfolio more towards higher-beta type markets, such as emerging markets, and there is potential for better prospects in the energy space than would have been the case with a Democrat clean sweep.”
Ben Emons, Managing director of global macro strategy at Medley Global Advisors
The Nikkei 225 stocks rose 2.5% in Japan, with the Topix recording a 1.54% increase. Kospi stocks from South Korea also increased by 1.44%.
Aside from these, stocks from Mainland China also recorded significant gains on Monday afternoon. The Shanghai and Shenzhen components increased by 1.9% and 2.43%, respectively. Moreover, Hong Kong’s Hang Seng index was up by 1.62%, while China’s exports increased a staggering 11.4%.
Shares of tech giants in the Chinese region have also seen significant increases in their claims. Chinese tech giant Tencent saw a 2.93% increase, and Alibaba recorded a 3.55% soar. SMIC’s shares also soared in its Hong Kong listing by 6.8%. ZTE rose by 8.79%.
“The markets welcome Biden becoming the next U.S. president.” He also added, “Sentiment has greatly improved. But the market is very much overbought. We have to be careful as large profits have been accumulated over the past couple of weeks.”
Louis Tse Ming-Kwong, managing director of Wealthy Securities
Aside from significant gains in Asia-Pacific stocks, oil prices have also recorded increases following the declaration of Biden’s presidential election win. International benchmark Brent crude futures recorded a 2.59% increase at $40.47 a barrel. Meanwhile, U.S. crude futures saw a 2.75% increase with a barrel priced at $38.16 each.
Moreover, the Chinese yuan gained more power at 6.5789 per dollar. The Australian dollar also increased from below $0.711 to $0.7291, while the Japanese yen decreased to 103.38 per U.S. dollar.
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