Asian markets traded mixed on Wednesday November 4, as investors weighed early signs that Democrats could win control of Congress and the gridlock in Washington that might follow.
The MSCI Asia Pacific Index edged up 0.1% as most regional markets opened higher. South Korea led the gains, with the Kospi jumping 1.48%. Japan moved the other way, with the country’s markets opening after a holiday on Tuesday, with the Nikkei 225 falling 1.55% and the broader Topix slipping 0.67%. Hang Seng futures pointed to a 0.5% decline for Hong Kong.
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In India, GIFT Nifty signalled a weak start for the country’s equities. That follows a four-day rally in which the Nifty 50 has climbed more than 1,300 points from its October 29 low, taking it from below 22,500 to within one good session of 24,000.
In China, Beijing’s market interventions added to the backdrop as, Vice Premier He Lifeng pledged on Tuesday to support a free and open economic environment in Hong Kong.
The People’s Bank of China (PBOC) raised the foreign-currency reserve requirement for banks to 6% from 4%, effective November 15.
That move ended a 13-day winning streak in the onshore yuan, the longest since 1996, after the currency had gained more than 4% against the dollar this year on strong exports and corporate conversion flows, according to a Bloomberg report.
The offshore yuan barely changed at 6.6651, while the Japanese yen gained 0.2% to 158.36 per dollar, as per early Asian trade.
The regional tone had been set by Wall Street, where US equities rallied on Tuesday as the artificial-intelligence (AI) trade regained momentum. Overnight, however, US futures gave up their gains. Nasdaq 100 contracts erased an advance of as much as 0.7% and fell 0.3%, while S&P 500 contracts surrendered a rise of as much as 0.5%.
Traders seemed to react to the first vote counts from the US midterm elections and to prediction markets that pointed to a Democratic victory. Millions of Americans cast ballots on Tuesday in races that would decide control of Congress.
According to a Bloomberg report, Polymarket prices a roughly 98% chance that Democrats take the House and about an 88% chance that they win the Senate, which would amount to a sweep of both chambers
Oil prices meanwhile swung, after two days of declines, as traders tried to read mixed signals on the US-Iran peace talks.
Brent crude traded at $104.27 a barrel in early Asian hours, having closed below $104 on Tuesday. The US West Texas Intermediate (WTI) hovered near $97 a barrel after moving through a range of roughly $5 on Tuesday.
With Agency Inputs
Asian markets mixed as investors weigh US midterm results; Kospi jumps 1.5%, Nikkei falls