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Investing.com – Asia Pacific stocks were up on Thursday morning, as the world continues to await a victor in the U.S. presidential elections.
Democrat candidate Joe Biden claimed victory in the states of Wisconsin and Michigan earlier in the day, inching him closer to the White House. Biden has 264 of the 270 electoral votes needed to declare victory, compared to incumbent President Donald Trump’s 214, according to Bloomberg. Whether the U.S. will see a Biden or Trump presidency now hinges on the vote count from a few remaining swing states, and Trump is already pursuing lawsuits and a recount in Pennsylvania and Michigan.
However, should Biden be able to overcome the challenge posed by Trump and become the next president, the failure to achieve the widely expected Democrat sweep of the Senate and House of Representative could hamper his ability to implement his agenda of big stimulus packages to aid the COVID-19-hit economy.
As investors await the results, Asian stocks followed U.S. shares’ lead in seemingly welcoming the prospect of a policy gridlock, hitting their highest level since March 201, and avoided big bets on a big stimulus package.
“A Biden win without full Senate support means less risk of regulation and higher corporate/personal taxes,” Nomura analysts said in a note.
“Equity markets have now decided they like the prospect of a ‘do nothing’ President, lacking control of both houses of Congress, in which respect history is on their side,” National Australia Bank (OTC:NABZY) head of FX Strategy Ray Attrill told Reuters.
“This view will, though, remain contingent on some sort of COVID-19 related fiscal package being agreed, ideally sooner rather than later,” Attrill warned.
Japan’s Nikkei 225 gained 1.20% by 11:04 PM ET (3:04 AM GMT) and South Korea’s KOSPI rose 1.49%
In Australia, the ASX 200 was up 0.99%.
Hong Kong’s Hang Seng Index soared 2.35%, leading the gains. Alibaba’s Hong Kong stocks soared 5.70% even as Chinese regulators halted the Shanghai and Hong Kong arms of Ant Group’s IPO, expected to have been the world’s biggest listing.
China’s Shanghai Composite was up 0.58% and the Shenzhen Component gained 0.68%.
Meanwhile, the Bank of England will hand down its monetary policy later in the day, which is widely expected to include quantitative easing program that could total GBP200 billion ($259.83 billion).
Investors also await the Federal Reserve monetary policy due on Thursday and the U.S. non-farm payrolls report, due on Friday.
“Both [central bank meetings] could be interesting given the need for central banks to do more. The Fed in particular will have to take up its QE role again with a weary sigh, in order perhaps to provide yet another bridge to the future when, hopefully, a government stimulus package will have been agreed,” IG chief market analyst Chris Beauchamp told Reuters.
