By Gina Lee
Investing.com – Asia Pacific stocks were mostly down on Friday, ending the week on a down note as the wait continues for a victor in the U.S. presidential election.
Democrat Joe Biden holds onto a razor-thin margin, claiming 264 of the 270 electoral votes needed with Pennsylvania, Georgia, Nevada and North Carolina still counting votes. Incumbent President Donald Trump has 214 votes and has already mounted legal challenges to vote counts in Nevada, Pennsylvania, Georgia and Michigan as well as requesting a recount in Wisconsin.
Trump also questioned the election’s credibility earlier in the day. “If you count the legal votes, I easily win. If you count the illegal votes, they can try to steal the election from us,” he said.
Should Biden win the presidency, he faces the additional challenge of a divided Senate. Current forecasts show that Republicans will retain control of the Senate, which will pose a challenge for Democrats to push through stimulus packages with large price tags.
However, expectations of any sort of stimulus package ran high among some investors.
“We still anticipate that there will be a fiscal package in excess of $1 trillion next year … this stimulus, when combined with a long-anticipated COVID-19 vaccine, can really lift the economy and drive growth. We consequently remain very upbeat on the prospects for 2021 and 2022,” ING Group (NYSE:) chief international economist James Knightley told Reuters.
Other investors stuck a more restrained note.
“The market reaction to the unfolding election news suggests that financial markets would prefer to see a constrained Biden presidency … the economic backdrop to this election is one of an incomplete global recovery that remains threatened by the continued spread of Covid-19 in many major economies as well as fast-fading fiscal support measures,” Paul O’Connor, head of multi-asset at Janus Henderson Investors, told Bloomberg.
Japan’s rose 1% by 10:23 PM ET (2:23 AM GMT). South Korea’s inched down 0.06% and Hong Kong’s inched down 0.07%, both giving up some earlier gains.
In Australia, the rose 0.73%, after the Reserve Bank of Australia said it is prepared to expand bond purchases if needed to support the economy. A deadline for Chinese traders to stop buying at least seven categories of Australian commodities has also arrived, putting Australian exporters on edge as an Australia-China trade dispute continues to unfold.
China’s was down 0.45% and the inched down 0.07%.
Meanwhile, U.S. Federal Reserve Chairman Jerome Powell stressed that the economy needs more fiscal and monetary policy support, and warned that mounting COVID-19 infection rates are a risk, as the Fed handed down its monetary policy on Thursday. The policy saw Fed officials keep interest rates near zero and make no change to asset purchases. The Bank of England also handed down its monetary policy on Thursday.
Investors now await the data from the U.S., due later in the day.
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