Global investors are closely monitoring the US presidential election, with its outcome expected to have significant repercussions for markets worldwide.
Asian stock indexes showed mixed results on Wednesday, while the US dollar surged, gaining over 1% against major currencies, including the euro, pound, and yen.
The result of the election, which may not be known during Asian trading hours, is likely to influence global economic conditions, particularly in Asia.
In Japan, the Nikkei 225 index rose by 2.25%, and Australia’s ASX 200 gained about 1%. However, stocks in China and Hong Kong faced headwinds, with the Shanghai Composite down 0.3% and the Hang Seng dropping around 3%.
Futures for US indexes, however, pointed to further gains, following strong performances on Wall Street, where the Dow Jones, S&P 500, and Nasdaq all closed up by more than 1%.
Bitcoin made headlines as it hit an all-time high, surpassing $75,000, reflecting optimism amid global uncertainty.
Still, analysts caution that markets could experience more fluctuations, especially in assets sensitive to the election results, such as the US dollar and Chinese stocks.
“The outcome of the election is crucial, and we could see continued volatility, particularly in assets directly affected by trade policies and international relations,” said Tim Waterer, Chief Market Analyst at KCM Trade.
With Donald Trump’s platform centered on aggressive trade tariffs, particularly targeting China, Asia’s markets are on edge.
Trump’s protectionist policies have already raised concerns about global supply chains and trade flows. Additionally, his foreign policy stance, particularly regarding Taiwan, could impact investor sentiment, given Taiwan’s critical role in the semiconductor industry.
On the other hand, Kamala Harris’s policies are expected to continue the more predictable approach of the Biden administration, with a focus on maintaining global trade relationships.
While her stance on trade is seen as less disruptive, a potential Harris administration could introduce stricter regulations in sectors like banking and healthcare, along with supportive policies for renewable energy and electric vehicle industries.
Investors are also preparing for key events later this week. The US Federal Reserve will announce its latest decision on interest rates on Thursday, with Jerome Powell’s remarks likely to influence global markets.
On Friday, Chinese officials are expected to reveal more details on their plans to address the slowdown in the world’s second-largest economy, which could further affect global market sentiment.
