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Asian shares inch up, investors brace for U.S. elections

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Asian shares ticked up in early Tuesday trade, supported by gains although sentiment was tempered ahead of the U.S. midterm elections, the first major electoral test of Donald Trump's big tax cuts and hostile trade policies.

MSCI's broadest index of shares outside <.MIAPJ0000PUS> rose 0.15 percent while Japan's Nikkei <.N225> gained 0.5 percent, a day after both fell more than one percent.

On Wall Street, the <.SPX> gained 0.56 percent, with financials such as supported by strong earnings.

In markets, crude prices wobbled near multi-month lows after the granted eight countries temporary waivers allowing them to continue buying from as formally imposed punitive sanctions on the Islamic republic.

Bucking broader gains, the <.IXIC> fell 0.38 percent as lost 2.8 percent following a Nikkei report that said the company had told its assemblers to halt plans for additional production lines dedicated to the XR.

Ahead of Tuesday's U.S. elections, investors generally expect opposition Democrats to take over the of Representatives while Trump's is tipped to retain the

While political gridlock between the and could hinder Trump's pro-business agenda and raise political instability, including hearings centring on the administration, some analysts say such an outcome may have already been priced in by investors.

If the Republicans retain their majority, global stocks are likely to rally on hopes of more tax cuts.

Trump said last month his administration planned to produce a resolution calling for a 10 percent for middle-income households.

"Everyone still remembers strong equity rallies after Trump was elected two years ago. So initially stock markets will gain," said Norihiro Fujito, at

"But further tax cuts would boost already large fiscal deficits and push the 10-year U.S. Treasuries yield above its October high almost instantly. Given rises in U.S. bond yields triggered a correction in equities last month, any rally in stocks is unlikely to last long," he added.

Many investors also expect Trump to continue to take a hard line on trade, regardless of the outcome of the elections.

In markets, U.S. Intermediate (WTI) crude futures slipped 0.3 percent to $62.86 a barrel after hitting a seven-month low of $62.52 on Monday.

Major currencies, moves were modest.

The euro traded at $1.1410 , about one cent above this year's low of $1.1301 touched on Aug. 15.

The yen changed hands at 113.22 per dollar, near its three-week low of 113.385 marked last Wednesday.

The British pound touched a two-week high of $1.3070 and last stood at $1.3065.

(Reporting by Hideyuki Sano; Editing by Sam Holmes)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 06 2018. 06:29 IST
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