Democratic Senate victory pushes stocks up, bonds fall

SINGAPORE (Reuters) – Bonds fueled losses as equities and commodities gained Thursday in anticipation of a big borrowing and big spending by the growth-boosting Democratic administration, after the run-off election that took gave the party control of the US Congress.

U.S. Treasuries had suffered their biggest selloff in months after the Democrats’ victories in two races in Georgia gave them tight Senate control, bolstering President-elect Joe Biden’s power to push through his platform.

Risk sentiment was temporarily dampened by images of President Donald Trump’s supporters storming Capitol Hill, but S&P 500 futures rose 0.6% and Nasdaq 100 futures rose 0.6%. increased by 0.8% during the session in Asia, while order was restored. FTSE futures rose 0.4% and EuroSTOXX 50 futures rose 0.2%.

Across Asia, large economically exposed stocks led the gains. Chipmakers Samsung and SK Hynix have driven the South Korean Kospi to an all time high. Miners Rio Tinto and BHP have reached unprecedented heights.

The largest MSCI index for Asia-Pacific stocks outside of Japan rose 0.7% and Japan’s Nikkei rose 2% to its highest level since 1990.

“It’s basically a mirror exchange,” said Mathan Somasundaram, director of Sydney-based research firm Deep Data Analytics, who added that the Democrats’ sweep was unexpected by most investors and “changes a lot.”

“Even though it’s a very slim margin, it gives Democrats a two-year window (to continue their agenda),” he said. “Anything that benefits from higher prices will work fine… when you look at the political parameters they’re trying to stick to, it’s about printing (money for) Main Street, not Wall Street. “

Wednesday’s bond sale pushed the yield on benchmark 10-year U.S. Treasuries above 1% for the first time since March. It climbed to 1.0510% on Thursday. [US/]

The US dollar wallowed as the result became clearer, as currency traders believe that large and growing US trade and budget deficits will weigh on the greenback. [FRX/]

The dollar hit an almost three-year low against the euro of $ 1.2349 and hovered near that level on Thursday. It also languished near recent multi-year lows against Australia, the Kiwi and the Swiss Franc.

CAPITOL CHAOS, CHINA CRACKDOWN

The exuberance has been tempered by some sales of tech stocks, as investors expect the industry to face taxes and regulations, and disturbing scenes of protesters storming the Capitol to disrupt the certification of the electoral defeat of Donald Trump.

Wall Street emerged from session summits as police evacuated lawmakers and struggled for more than three hours to clear Capitol of Trump supporters.

“What gives us a bit of a break is that the economy is still very fragile and I think Democrats are unlikely to have such an easy time as the markets are trying to predict by adopting some of these policies. “said Tim Chubb, director of investments at wealth advisor Girard in Pennsylvania.

Since then, Congress has reconvened to resume electoral certification, where it quickly became clear that objections from pro-Trump Republican lawmakers to Biden’s victory in the battlefield states would be overwhelmingly dismissed.

Meanwhile, the US crackdown on Chinese companies appears to be deepening, with sources telling Reuters that the Trump administration is considering extending investment bans to tech giants Alibaba and Tencent.

Shares of both companies fell more than 4% in Hong Kong, and shares of three Chinese telecommunications companies that the New York Stock Exchange finally decided to remove after a week of about-face also fell sharply.

Oil prices hovered near a 10-month high, basking in the wake of a production cut promised by Saudi Arabia. Brent futures were up 0.7% to $ 54.69 per barrel and US crude futures were up 0.9% to $ 51.07 per barrel. [O/R]

Gold was stable at $ 1,920 an ounce and the company Bitcoin after hitting a new high of $ 37,800.