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Asian markets advance as Biden solidifies lead over Trump
ASIAN markets rose on Thursday morning tracking gains on Wall Street and Europe overnight as the odds swung to favour Democratic challenger Joe Biden after he took Michigan and Wisconsin, flipping both states won by US President Donald Trump in 2016.
With Mr Biden securing 264 of the 270 electoral votes that are required to win the presidential election, all eyes are on vote counts in Nevada, which has six electoral votes, enough to carry the former vice-president past the finish line.
Investor focus on Thursday continued to be on the presidential race, with the possibility of Mr Biden as president lifting market sentiment.
"As things stand this morning, the US election appears headed towards a Biden victory with razor-thin margins in several battleground states, an increased probability of a contested election, and Republicans retaining control of the Senate," said AxiCorp's chief global markets strategist Stephen Innes.
"With no blue wave tsunami, perhaps massive regulation and higher taxes are now off the stock markets' bearish hit list," he added.
As at 11.05am Singapore time, Asian markets saw strong gains, with Hong Kong's Hang Seng Index taking the lead in the region with shares advancing 2.2 per cent. Meanwhile, Singapore's Straits Times Index was up 1.9 per cent. Elsewhere, the FTSE Bursa Malaysia KLCI Index gained 1.3 per cent, Tokyo's Nikkei 225 index climbed 1 per cent, Jakarta Composite Index jumped 1.6 per cent, while South Korea's Kospi put on 1.5 per cent.
Said Selena Ling, OCBC's head of treasury research and strategy: "Investors are already trying to define what a divided Congress may mean - if Biden may have difficulty getting free rein to pass his corporate tax hikes and tighten regulation for high-tech, this would be good for the stock market as a whole, which explains the stock market rally overnight.
"On the flip side, a smaller fiscal package could mean that monetary policy and the Fed would have to step up to fill the gap."
Meanwhile, Mr Innes pointed out that an exact resolution on the election "remains on the cloudy horizon" as Mr Trump has declared his intent to take the battle to the US Supreme Court.
"It will be interesting to see what happens once the dust settles a bit, but I have a tough time imagining this market running higher if the election ends up in the court," he said.