Stocks cautious

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    SYDNEY- Asian share markets turned skittish and S&P futures wobbled on Wednesday as results from the US presidential election showed an agonizingly close race.

    Investors had initially wagered that a possible Democratic sweep by Joe Biden could ease political risk while promising a huge boost to fiscal stimulus, hitting the safe-haven dollar and bonds.

    But the mood quickly sobered on signs President Donald Trump could well snatch Florida and was much closer in other major battleground states than polls had predicted.

    “In typical election risk-driven fashion it’s been the stairs up and express elevator down as early results, especially out of Florida, are pointing away from the quick Biden outcome markets were looking for,” said Stephen Innes, Chief Global Markets Strategist at Axi.

    “Markets have taken a step back from the Democratic sweep scenario.”

    Instead, investors were now hedging against the risk of a contested election or at least a drawn-out process as mail-in ballots were counted.

    That saw 10-year Treasury yields dive all the way back to 0.80 percent, from a five-month top of 0.93 percent. The fall of 7 basis points on the day was the largest since mid-May.

    E-Mini futures for the S&P 500 veered wildly between negative and positive and were last up 0.36 percent. EUROSTOXX 50 futures lost 0.5 percent and FTSE futures 0.8 percent.

    Japan’s Nikkei was still ahead by 1.4 percent, but MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.6 percent.

    “It’s a wait-and-see,” said Matt Sherwood, head of investment strategy at Perpetual in Sydney.

    “I think the odds of a clean (Democrat) sweep are diminishing, almost by the minute.

    That reduces the possibility, or the likelihood at least of a large stimulus program being agreed to in the first days of a Biden administration.”