SYDNEY (Reuters) – Stocks rose sharply, oil prices rose and the dollar remained weak on Monday on expectations for less regulatory changes and more monetary stimulus measures under US president Joe Biden aided the risky appetite.
The Democratic candidate’s victory in the US presidential election is largely valued by markets, which have traded with the views of a Biden president and the Republican-controlled US Senate. from last week.
E-mini futures contract for the S&P 500 SC1 up more than 1.5% on Monday while Nasdaq futures NQc1 up more than 2%, signaling a positive start to the US market.
MSCI’s broadest index of Asia Pacific shares outside of Japan .MIAPJ0000PUS rose 1.3% to 613.95 points, the highest since January 2018. It rose 6.2% last week for the best weekly performance since early June.
Dave Wang, portfolio manager at Nuveen Capital in Singapore, said: “While a lot of attention has been paid to Trump and Biden, the markets reacted strongly to the division congress (potentially happen), which means more confidence that interest rates will be lower in the long run, ”said Dave Wang, portfolio manager at Nuveen Capital in Singapore.
“The best opportunities are now in segments of emerging markets, especially China and North Asia. I believe that earnings momentum and valuations put China in a very attractive risk / reward position. “
Chinese stocks started higher with a blue-chip CSI300 index .CSI300 1% increase in the hope of better Sino-US trade relations under Biden.
Japan .N225 2% increase while the main index of Australia .AXJO, Hong Kong .HSI and Korea .KS11 1.7% increase each.
Stocks rallied sharply last week, with the S&P500 .SPX up 7.3%, the best increase in an election week since 1932, according to National Bank Australia analyst Tapas Strickland.
However, Matt Sherwood of Australian fund manager Perpetual said Biden’s victory did not necessarily adjust his portfolio.
“Ultimately, we think the US economy is still quite fragile and growth is slowing down,” Sherwood said.
“You may be more likely to attract your portfolio to higher beta-type markets, such as emerging markets, and potentially better prospects in the energy space. in the case of being wiped out by the Democrats. “
Oil prices spiked on Monday as investors cheered Biden’s victory, eliminating worries about lackluster demand amid rising global coronavirus infections. [O/R]
Brent Crude Oil LCOc1 added $ 1 to $ 40.48.
Analysts warn the path could become tougher from here as investors focus on Biden’s ability to expand fiscal stimulus and measures to reduce the spread of COVID-19. .
The United States saw a record number of new coronavirus infections last week, with a total of nearly 10 million cases.
US-based asset manager Jim Wilding at Confluence Financial Partners in Pennsylvania added a warning to the S&P 500 .SPX not far from all-time highs and equity valuations are generally high.
He noted: “While we remain positive on the medium-term outlook and believe that a divided government reduces the likelihood of a bear scenario, we will curb unrestrained enthusiasm at all levels. current degree.
A fiscal stimulus plan is doable despite a divided government, analysts say, although a larger package is less likely. That leaves the US Federal Reserve doing more to boost the world’s largest economy.
As a result, the dollar has weakened USD = in recent days while mandates grow like the Australian dollar AUD = rallied with President Biden considered less likely to be commercially confrontable.
The dollar is virtually unchanged against the Japanese yen JPY = at 103.31, after falling about 1.3% last week.
The Aussie was up 0.2%, up 3.3% last week.
Investor focus will also be on the pound and euro this week with upcoming UK-EU trade talks with the EU summit on November 15.
Later in the day, the Bank of England chief economist will deliver a speech on ‘The economic impact of coronavirus and the long-term effects for the UK’.
Euro EUR =, up 1.9% last week, slightly higher on Monday at $ 1.1887. Sterling GBP = increased to $ 1,3183.
(For a picture of Asian stock markets: performance, click here
Report by Swati Pandey of Sydney; Additional reporting by Tom Westbrook and Michelle Price; Edited by Daniel Wallis and Sam Holmes