Asia: Markets rally on FBI Clinton announcement

[HONG KONG] Asian equities staged a rebound and the Mexican peso rallied Monday as traders breathed a sigh of relief after the head of the FBI said market-favourite Hillary Clinton would not face charges over her use of a private email server.

Investors were sent into a funk last week after James Comey said messages linked to the Democratic presidential nominee were being looked at, sending rival Donald Trump surging in opinion polls just days before the November 8 vote.

The former secretary of state is considered by most investors to be a safer, more stable bet than Mr Trump, who is seen as a loose cannon, with policies many fear could wreck the world's top economy.

However, on Sunday Mr Comey announced he would not change his July recommendation that Clinton not be prosecuted for putting US secrets at risk.

"Markets are likely to remove some of the risk premium taken as a precaution against a Trump victory now that Hillary Clinton will not be charged over her use of a private email server," said CMC Markets chief analyst Ric Spooner.

"However, an element of uncertainty remains over this election. It seems unlikely that markets will make a full 'risk on' move until Mrs Clinton is declared the winner."

Tokyo's Nikkei ended the morning session 1.4 per cent higher while Hong Kong was up 0.3 per cent, Sydney added 1.2 per cent and Seoul gained 0.8 per cent. Wellington soared more than two per cent and Singapore put on 0.4 per cent.

Futures on Wall Street also rallied, with the broad-market S&P 500 index up 1.4 per cent and the Dow 1.1 per cent higher.

The news also provided strong support for the Mexican peso, which soared almost two per cent against the dollar Monday, having been battered last week.

The peso is considered a proxy for Mr Trump's chances owing to his anti-Mexican rhetoric throughout the campaign including his pledge to remove undocumented migrants, build a wall and tear up a trade deal.

Also helping stocks was a solid US October jobs report which gave the Federal Reserve fresh ammunition to raise rates in December, while the bank's Vice Chair Stanley Fischer said the labour market was in a "powerful" recovery and that inflation was picking up.

The dollar rallied on the FBI news, breaking back above 104 yen, while also ticking back up against the pound.

The sterling surged last week after Thursday's London court ruling that the British government would need parliamentary approval to officially move to pull out of the European Union.

The pound pushed above US$1.25 to its highest level in a month but eased slightly on Monday.

AFP