SINGAPORE / NEW YORK (Reuters) – Bonds took care of losses and Asian stock markets rose on Thursday in anticipation of a large loan and high spending by the Democratic administration to drive growth following the party’s by-elections that gave control of both houses of Congress US.
U.S. Treasuries have seen the highest sales in months, and the S&P 500 index hit a record after Democrats’ two-race victories in Georgia gave them tight Senate control and the power to get their agenda across.
The largest MSCI index of Asia-Pacific equities outside Japan rose 0.5% to a record high, driven by jumps of more than 1.5% in South Korea’s chip maker Kospi and industry. Australian ASX 200.
Japan’s Nikkei rose 2% to its highest since 1990. The S&P 500 futures rose 0.6% and the Nasdaq 100 futures rose 0.9% as markets shook a late session from New York, when the chaotic protests in Washington disturbed traders. [.N]
“It’s basically a reform transaction,” said Mathan Somasundaram, head of research at Sydney Deep Data Analytics, who added that the sweep of Democrats was unexpected by most investors and “is changing a lot.”
“Even if it has a thin margin, it gives Democrats a two-year window (to continue their agenda),” he said. “Anything that benefits from rising prices will go well … when you look at the policy settings they’re trying to pass, it’s about printing (money for) Main Street and not Wall Street.”
Georgia voters have elected the first black senator in state history, Raphael Warnock, and the youngest member of the Senate, Jon Ossoff. Along with Vice President Kamala Harris’s equality vote, the victories allow Democrats to control the chamber.
Subsequent bond sales pushed the yield on the US Treasury to 10 reference years by more than 1% for the first time since March. It stabilized at 1.0422% on Wednesday. [US/]
The US dollar has also fallen as the result has become clearer as foreign traders believe that large and growing US trade and budget deficits will weigh on the green dollar. [FRX/]
The dollar hit a three-year low of $ 1.2349 and fluctuated near that level on Thursday. It has also fallen into the gutters for several years against the Australian, the kiwi and the Swiss franc.
CHAPTER CHAOS, CHINA CRACKDOWN
The exuberance has been tempered by a sale of technology stocks, as investors expect the sector to face taxes and regulations and disturbing scenes of protesters storming the Chapter to disrupt Donald Trump’s electoral defeat certification.
The Wall Street index fell from session highs as police evacuated lawmakers and fought for more than three hours to remove the Capitol from Trump supporters.
“What gives us a break is that the economy is still very fragile and I think it’s unlikely that Democrats will have as easy a time as the markets are trying to predict by adopting some of these policies,” said Tim Chubb, head of investments in wealth advisor Girard of Pennsylvania.
Congress has since met to resume election certification. Shares on Twitter fell slightly after hours, when the social network said it had temporarily blocked Trump’s account for violating the platform’s rules.
Meanwhile, the US crackdown on Chinese companies appears to be deepening, sources told Reuters that the Trump administration is considering extending investment bans to technology giants Alibaba and Tencent.
Shares of both fell by about 3% in Hong Kong and shares of three Chinese telecommunications companies that the New York Stock Exchange finally decided to eliminate after a week of flip-flopping also fell sharply.
Oil prices fluctuated by almost a maximum of 10 months, leaving behind the brilliance of production promised by Saudi Arabia. Gross futures rose 0.5% to $ 54.60 a barrel, and US gross futures rose 0.8% to $ 51.02 a barrel.
Gold was steady at $ 1,916 an ounce and the bitcoin firm hit a record $ 37,400.
Reporting by Tom Westbrook in Singapore, Imani Moise in New York and Joori Roh in Seoul; Editing by Sam Holmes and Jane Wardell