By Gina Lee
Investing.com – Asian stocks were up on Tuesday morning, with all eyes on U.S. as the presidential election starts later in the day. Stocks saw gains during the Asian session despite the possibility of a contested election, alluded to by both Democrat candidate Joe Biden and incumbent President Donald Trump.
“It’s pretty much a binary outcome … the question is, is the market right now looking at a Biden victory? And will it be disappointed if we don’t have that?” Prudential Financial (NYSE:PRU) chief market strategist Quincy Krosby told Bloomberg.
A contested U.S. election could also introduce volatility to the market. Although Biden is ahead of Trump in the polls, votes from swing states could lead to a closer race.
“Uncertainty will likely remain until Wednesday morning when we should have clarity on who holds the Presidency and Senate, assuming, and this is a big if, the polls are correct,” Nordea Investment Funds SA senior macro strategist Sebastien Galy said in a note.
In Australia, the ASX 200 rose 1.79% by 11:23 PM ET (3:23 AM GMT), ahead of the Reserve Bank of Australia (RBA) ‘s crucial monetary policy due to be handed down later in the day. The policy is widely expected to encompass a record low rate cut to 0.1% and a move towards quantitative easing, including a government-bond buying program.
Some investors were betting on global central banks’ monetary policies remaining flexible and supporting share prices if the election does not produce a clear winner immediately.
“Whatever the outcome [of the U.S. election], central bank policy is poised to remain extremely accommodative globally … markets appear to have embraced that liquidity theme,” ANZ Bank analysts said in a note.
The Federal Reserve and the Bank of England will also hand down their monetary policies on Thursday.
China’s Shanghai Composite was up 1.09% and the Shenzhen Component gained 1.14%. Investors await October's Caixin Services Purchasing Manager’s Index (PMI), to be released tomorrow, to gauge the Chinese economic recovery from COVID-19. The Caixin manufacturing PMI for October, released yesterday, rose to 53.6 and the manufacturing and non-manufacturing PMIs, released on Saturday, rose to 51.4 and 56.2 respectively.
Hong Kong’s Hang Seng Index rose 1.77%. and South Korea’s KOSPI gained 1.75%.
Japanese markets were closed for a holiday.
On the COVID-19 front, some states saw a record number of daily cases even as numbers across the U.S. start to slow down slightly. On the data front, the country will release October’s jobs report, including nonfarm payrolls and the unemployment rate, on Friday.