Global investors are keeping a keen eye on the US election, eager to learn who will lead the world’s largest economy. The outcome is anticipated to significantly influence the global market, particularly in Asia.
On Wednesday, most Asian stock indices showed positive movement, and the US dollar also experienced a rise. However, it remains uncertain whether the election results will be available during Asian trading hours, as counts in key battleground states could take several days to conclude.
In Japan, the Nikkei 225 rose by 2%, while Australia’s ASX 200 gained about 1%. Meanwhile, in mainland China, the Shanghai Composite remained unchanged, and Hong Kong’s Hang Seng dropped around 2.5%.
Futures trading on major US stock indices indicated sharp increases, following gains of over 1% for the Dow Jones, S&P 500, and Nasdaq.
Bitcoin, the world’s largest cryptocurrency, surged to an all-time high of over $75,000 (£58,145). The US dollar strengthened by more than 1% against a basket of major currencies, including the euro, pound, and yen.
Former President Donald Trump has vowed to implement significant trade tariffs, especially on China, should he return to office. Moody’s Analytics’ Katrina Ell noted that Trump’s trade policies have raised concerns in Asia, particularly due to his protectionist stance and promises of higher tariffs on imports into the US.
Trump’s isolationist foreign policy has also raised doubts about his commitment to defending Taiwan from potential Chinese aggression, especially given Taiwan’s critical role in global semiconductor production.
Meanwhile, Trump’s tax policies have been largely welcomed by large US corporations. Jun Bei Liu, a portfolio manager at Tribeca Investment Partners, said, “If Trump gets elected, we should see pro business policies and tax cuts, in turn possibly driving up inflation and less rate cuts.”
Should Vice President Kamala Harris secure the presidency, investors expect her approach to trade and foreign policy to mirror that of President Joe Biden, marked by more predictable global trade flows and tariffs.
Katrina Ell observed that Harris is likely to maintain the status quo on global trade, while also possibly tightening regulations on sectors such as banking and healthcare. Her party’s renewable energy policies could also benefit electric vehicle manufacturers and solar companies.
Investors will also be focusing on other key developments this week. On Thursday, the US Federal Reserve will announce its latest interest rate decision, with comments from Chairman Jerome Powell set to attract global attention. On Friday, Chinese officials are expected to reveal further plans to address the economic slowdown in the world’s second-largest economy.
Frances Ibiefo
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