HONG KONG: Stocks, oil and high-yielding currencies rallied Monday after Joe Biden was declared winner of the US election at the weekend, lifting a major source of uncertainty, while traders are hoping lawmakers will now focus on passing a new stimulus for the world’s biggest economy.
While Donald Trump has yet to concede and has launched several legal challenges, it is widely accepted that the Democrat will become the 46th president, removing a crucial hurdle for equity traders this year.
Observers said the focus will now be on Biden’s economic and foreign policy approach, with optimism for a less tumultuous leadership following four years of the bombastic real estate tycoon.
Markets were already surging last week as it became apparent the former vice president was on course for victory and that Republicans would likely hold the Senate, allowing them to rein in any big regulatory or tax policies.
On Monday Tokyo led the gains, surging two percent, while Hong Kong, Shanghai, Sydney, Singapore, Seoul, Wellington and Taipei were all up more than one percent.
Wall Street futures also rallied, with the Dow, S&P 500 and Nasdaq all seen opening more than one percent up.
Traders are now looking to Capitol Hill hoping for a fresh rescue package for the economy after lawmakers failed to hammer out anything despite months of haggling, though any new plan will not likely be as big as what would be expected from a Democrat-led Congress.
“More fiscal support is likely forthcoming,” said Invesco strategists including Brian Levitt. “While it may not be the outsize fiscal package that the Democrats had envisioned, it will likely be large enough to provide an additional boost to the economic recovery.
“Paradoxically, a more modest fiscal bill may serve to extend the market and business cycles, as it would be unlikely to bring forward the inflationary pressures that presage Fed tightening and the end of cycles.”
