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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Asian markets’ morning session up as Wall St sees gains ahead of US elections

Asian markets across the board in Japan, Singapore, Malaysia, and China saw positive trading on Wednesday morning ahead of the US mid-term elections.

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Asian markets saw positive trading on Wednesday morning, following Wall Street gains in anticipation for the United States (US) congressional mid-term elections results. The results are viewed as a vote by the US citizens on their president Donald Trump’s governance.

Tokyo shares opened higher on Wednesday, with the benchmark Nikkei 225 up 0.10% or 21.08 points at 22,168.83. Malaysia shares also treaded higher early morning, with the FTSE Bursa Malaysia Kuala Lumpur Composite Index up 0.26% or 4.36 points, to 1712.71.

Singapore shares opened higher, with the Straits Times Index up 23.88 points or 0.8% to 3,084.50. Some bank stocks saw positive trading an hour into market’s open, with OCBC shares up by 1.06% or 12 Singapore cents, at S$11.44, and UOB up 0.28% or 7 Singapore cents, at S$24.72.

Chinese stocks followed the consensus with other Asian markets as mainland investors grow hopeful on the changes the US mid-term elections could bring. China and the US have been embroiled in a trade war and any changes to the election could signal a turning point in the relationship between both nations.

Minutes into trading, the Shanghai Composite Index was 0.14% or 3.74 points higher, at 2,663.09, while the Hang Seng Index was up 0.26% or 69.16 points 26190.12. China’s smaller Shenzhen Composite Index rose 0.57%.

Wall Street’s key indices closed higher on Tuesday as investors put their faith in the US mid-term congressional elections, hoping that the results could shed some uncertainties in the market.

The Dow Jones Industrial Average rose 0.68% or 173.31 points, to close at 25,635.01, while the Nasdaq Composite gained 0.64% or 47.11 points, to 7,375.96 points. The S&P 500 rose 0.63% or 17.14 points, to 2,755.45.

Consequences to change in the house of cards

The Wall Street had been expecting for the Republican Party to lose control of the House of Representatives, while keeping the Senate. US president Donald Trump belongs to the Republican party.

If the Democrats win both the House and the Senate, a sharp selloff is expected in the near term. More tax reliefs are expected if the Republicans keep the House, and stocks may rally due to the tax breaks.

“While the Senate is seen to remain with the Republicans, a status quo Republicans House is expected to help further tax cuts beyond 2020 and a Democratic House to reduce some pressure on the fiscal end and thereby see a more benign rate hike path for equities, both being equities positive,” said IG market analyst Pan Jingyi.

The next 24 hours will be critical in determining the trend for the greenback, said Ms Pan. “As far as the US dollar index goes, prices had been hit back into the consolidation zone last week, trading somewhat directionless on a short-term basis.”

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.  Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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