By Gina Lee
Investing.com – Asia Pacific stocks were mostly up on Wednesday morning, giving up some ground. Investors are on tenterhooks as votes are counted in the U.S. presidential election with no clear winner yet.
Currently, Democrat candidate Joe Biden has 131 electoral votes, while incumbent President Donald Trump has 98 votes, according to Bloomberg.
There were wide expectations that Biden would lead a Democrat sweep in the White House, Senate and House of Representatives, reducing political risk and increasing the possibility of big stimulus packages to help the COVID-19-hit economy compared to a Trump re-election. However, these expectations were shaken with a closer race than expected and it could be several days before the result is announced. Trump won Indiana’s electoral votes, the first state to be decided.
Investors are now hedging against the risk of a contested election as mail-in ballots are being counted.
"In typical election risk-driven fashion it's been the stairs up and express elevator down as early results, especially out of Florida, are pointing away from the quick Biden outcome markets were looking for … markets have taken a step back from the Democratic sweep scenario,"Axi chief global markets Stephen Innes told Reuters.
Other investors agreed with Innes.
“The race is closer than the market thought. Reflation is one thing, but a close result, and we are far from the end, is a market negative,” Canadian Imperial Bank of Commerce strategist Patrick Bennett told Bloomberg.
Japan’s Nikkei 225 jumped 2.35% by 11:11 PM ET (3:11 AM GMT), returning from a public holiday.
South Korea’s KOSPI rose 0.77%
In Australia, the ASX 200 was up 0.22%, reversing earlier gains, despite the Reserve Bank of Australia (RBA) announcing a monetary policy on Tuesday including an interest rate cut to 0.10% from 0.25% and the purchase of AUD100 billion ($71.10 billion) worth of government bonds by the RBA board.
Hong Kong’s Hang Seng Index gained 0.40%, recovering from the shock of Ant Group Co. halting both the Shanghai and Hong Kong legs of a planned $35 billion dual listing on Tuesday, after a meeting with Chinese regulators.
China’s Shanghai Composite rose 0.41%, while the Shenzhen Component was down 0.25%. October's Caixin Services Purchasing Managers Index (PMI) rose to 56.8, according to data released earlier in the day. The reading is up from September's 54.8 figure.
Investors also await monetary policy from the Federal Reserve and the Bank of England, due on Thursday. Both policies are widely expected to at least give a nod to further stimulus measures to aid their economies.