SYDNEY- Shares surged, oil prices jumped and the dollar stayed weak on Monday as expectations of fewer regulatory changes and more monetary stimulus under US presidentelect Joe Biden supported risk appetite.
The Democratic candidate’s victory at the US Presidential election was largely priced-in by markets, which had been trading with the view of a Biden presidency and a Republicancontrolled US Senate since last week.
E-mini futures for the S&P 500 jumped more than 1.5 percent on Monday while Nasdaq futures rallied over 2 percent, signaling a positive start for US markets.
MSCI’s broadest index of Asia Pacific shares outside of Japan jumped 1.3 percent to 613.95 points, the highest since January 2018. It had climbed 6.2 percent last week to clock its best weekly performance since early June.
“While lots of attention was given to Trump vs Biden, markets have reacted strongly to the (likely) split congress, which means more confidence that interest rates will be lower for longer,” said Dave Wang, portfolio manager at Nuveen Capital in Singapore.
“The best opportunities now lie within segments of emerging markets, in particular China and North Asia. I believe earnings momentum and valuation put China in a very attractive risk/reward position.”
Chinese shares started higher with the bluechip CSI300 index up 1 percent on hopes of better Sino-US trade relations under Biden.