Shares and bonds gain as Biden inches toward victory

Agencies | Washington

The Daily Tribune – www.newsofbahrain.com

Europe and Asia’s stock markets climbed and bonds extended their rally on Thursday as Democrat Joe Biden inched closer to winning the White House and Britain’s central bank become the latest to shovel in the additional stimulus.

Biden is now favoured to oust Donald Trump after victories in Michigan and Wisconsin, but Democrats are unlikely to win the Senate. That led investors to wager on a policy gridlock that would prevent greater regulation.

With the Bank of England adding 150 billion pounds ($195.20 billion) to its bond-buying programme as Europe's markets opened, the FTSEurofirst .FTEU3 was up 0.8% and Italy's five-year bond yields fell below zero. [EUR/GVD]

Asian stocks .MIAPJ0000PUS climbed 2% overnight to reach their highest since February 2018.

Japan's Nikkei .N225 rose 1.7% to a more than nine-month top, South Korea .KS11 gained 2.4%, and Chinese blue chips .CSI300 added 1.3% on hopes a Biden White House would ease up on tariffs.

A split U.S. Congress, while potentially limiting fiscal stimulus, would have some advantages, said Michele Pedroni, a fund manager at Decalia Asset Management in Geneva.

“The big bad wolf of regulation and taxes is further away from the door and many, who have de-risked into the event, will be forced to re-risk,” she said.

E-Mini futures for the S&P 500 ESc1 rose 1.6% and NASDAQ futures NQc1 2% after both real-time markets had surged on Wednesday as the election results unfolded.

Amazon AMZN.O, Facebook FB.O, and Google GOOGL.O have all soared 6% to 8%.

Both Trump and Biden have paths to 270 Electoral College votes as states tallied mail-in ballots. Biden remained optimistic on winning while Trump filed lawsuits and demanded recounts.

The divided Congress that looked likely to emerge was “often seen as the ‘goldilocks scenario’ for financial markets -- no radical policy changes and the Fed providing ample liquidity to try to support the economy and financial markets when required,” said Randal Jenneke, a portfolio manager at T. Rowe Price