Asian Stocks Mixed Even As Trump's Second Term Powers Wall Street
The focus will now shift from election to the Federal Reserve as the central bank will most likely cut interest rates, according to Bloomberg News
Stocks in the Asia-Pacific region opened mixed on Thursday following Wall Street's record rally as investors positioned their portfolios ahead of Donald Trump's return to the White House.
Equity benchmarks in South Korea and Australia opened lower while the Japanese stocks were marginally higher. The Nikkei was 446 points, or 1.14%, higher at 39,880, while the Kospi was down 19 points, or 0.71%, at 2,548 as of 5:35 a.m.
Most stocks in Asia ended the previous session with gains as investors weighed in on the possibility of Trump's second term as he led the presidential race against Kamala Harris, which he later won. Kamala Harris later conceded the election and told supporters to accept her election loss.
The S&P 500 had its best post-Election Day session in history while the Nasdaq 100 rose to a fresh record. The S&P 500 and Dow Jones Industrial Average advanced 2.53% and 3.57%, respectively, while the Nasdaq Composite climbed 2.95%.
Expectations that a Trump policy agenda favouring lower taxes and less regulation may help corporate earnings were reflected in gains for US markets.
A note from Goldman Sachs Group Inc. had previously called out that a Republican sweep may push the S&P 500 up by 3%.
US 10-year yields advanced 17 basis points to 4.44%, while Bitcoin hit a record high as crypto investors were upbeat on Trump's return. Most Asian currencies fell on Wednesday as the dollar strengthened. Japanese yen fell the most by 1.2%, followed by a similar depreciation in the Malaysian ringgit.
Meanwhile, the focus will now shift from election to the Federal Reserve as the central bank will most likely cut interest rates by a quarter percentage point on Thursday, according to Bloomberg News. However, traders remain wary of the extent of Fed cut next year due to the possibility of high inflation under a Trump presidency.
The Philippines' GDP print, Australia's commerce figures, and China's foreign reserves and trade data are among the key points to watch out for in Asia on Thursday.
Crude oil prices steadied as traders weighed the likely impact of Trump’s election victory. Brent crude was trading 0.81% lower at $74.92 a barrel as of 6:00 a.m. IST. West Texas Intermediate was up 0.03% at $71.71.
