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Wall Street futures, Asia stocks jump back on GOP's house prospects

Reuters  |  TOKYO 

By Hideyuki Sano

TOKYO (Reuters) - Wall Street stock futures and Asian shares erased losses to eke out small gains on Wednesday as early results of U.S. mid-term elections appeared to show Republicans improving their chances of retaining their grip on

U.S. S&P500 futures were up 0.4 percent, clawing back earlier losses of 0.4 percent, and the dollar pared its decline, as Republicans were on track to pick up a few closely-contested seats on the

The is billed as a referendum on Donald Trump's polarising style and "America First" policies.

MSCI's broadest index of shares outside gained 0.2 percent while Japan's Nikkei rose 0.6 percent.

"It seems like the Republicans have the real chance of taking not only the but also the House. That appears to be boosting stocks," said Hirokazu Kabeya, at

Investors had expected the opposition Democrats to pick up at least 23 seats they need to gain a majority in the House and, as a result, remained sceptical about Trump's proposal late last month on tax cuts for middle-income households.

While the final results are still hours away, markets have reacted as a surprise victory by the Republicans could boost the chances of further tax cuts and pro-policies.

On the other hand, many investors also expect Trump to continue to take a hard line on tariffs, which he can impose without Congressional approval. That keeps alive worries about a trade war between and the

Trump's massive tax cut, enacted in December, and a spending agreement reached in February have helped lift the U.S. economy, but they have also widened U.S. federal budget deficit.

As a result, Treasury supply has been growing, pushing U.S. bond yields higher.

The 10-year U.S. Treasuries yield rose to at 3.224 percent, near its seven-year high of 3.261 percent touched a month ago, as investors sold ahead of this week's record amounts of longer-dated government debt supply.

prices were soft after a 2 percent fall the previous day, with U.S. crude futures hitting an eight-month low as granted sanction waivers to top buyers of Iranian and as said it has so far been able to sell as much as it needs to.

U.S. Intermediate (WTI) crude futures traded down 0.7 percent at $61.78 a barrel having hit a low of $61.31 on Tuesday, the weakest price since March 16.

The dollar index recovered from early losses to trade almost flat.

The euro stood flat at $1.1427, retreating from a rise to two-week high of $1.1473.

The yen stood steady at 113.45 per dollar while the British pound changed hands at $1.3100, flat on the day.

Earlier the sterling hit a three-week high, extending gains on hopes of a Brexit deal breakthrough after said "Thumbs Up" on his way out of a cabinet meeting.

That helped sterling recover losses following remarks from a of the Northern earlier that it looked like Britain would exit the EU without a deal.

(Reporting by in Tokyo; Editing by Sam Holmes)

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

First Published: Wed, November 07 2018. 09:21 IST