© Reuters. A man wearing a protective face mask walks past a screen displaying a chart showing the latest Nikkei stock average outside a broker during the coronavirus disease (COVID-19) outbreak in Tokyo
From Anshuman Daga
SINGAPORE (Reuters) – Asian stocks got off to a good start on Tuesday. Investors relied on strong manufacturing data from major economies, while the dollar and gold held ground ahead of the US election due to political uncertainties.
President Donald Trump and Democratic rival Joe Biden last pushed for votes in battlefield states as their campaigns braced for post-election disputes that could prolong a divisive presidential election.
US stock futures traded higher, despite many market participants expecting short-term volatility, especially after a nervous week. S&P 500 futures () rose 0.5%, EUROSTOXX 50 futures () rose 1% and futures () rose 0.9%.
Blackrock (NYSE 🙂 Investment Institute strategists said polls indicated a greater likelihood of a democratic election campaign.
"We're starting to pick up topics that we think would outperform if this happens, and overall we're moving towards a riskier stance despite last week's market decline," the strategists said in a report.
MSCI's broadest index for stocks in the Asia-Pacific region outside of Japan () rose 1% for the second straight day. The reading is just 1% below the 2-1 / 2 year high from mid-October and down 5% this year.
South Korea's main index rose 1.7%, the Hong Kong () and Sydney () markets rose 2% and the Chinese blue chips () rose 0.8%. Japanese markets were closed for holidays.
"We are upgrading Asian ex-Japan stocks and Asian fixed income stocks to overweight as China and other Asian economies have better contained COVID-19 and are further ahead in the economic reboot," said the BlackRock Investment Institute. "We expect this dynamic to continue in the coming months."
The data showed that economic activity was improving across the board.
Manufacturing activity in the US accelerated faster than expected in October, with orders rising to their highest level in nearly 17 years, while Chinese factory activity grew the fastest in a decade and production in the euro area also accelerated.
Analysts said the prospect of no immediate presidential race winner is the biggest drag on markets. Trump follows Biden in national opinion polls, but polls in the swing states that decide on the election show a closer race.
"The key to the stock market in the short term is concerns about an uncertain and timely election result and the possibility of a controversial outcome," said Marc Chaikin, founder of Chaikin Analytics, a Philadelphia-based quantitative investment research firm. Australia The ASX 200 ( ) gained the most in three weeks before the country's central bank eagerly awaited the key rate.
Oil prices stabilized after two weeks of selling, with Brent futures () falling 0.1% to $ 38.90 a barrel but holding most of the rebound overnight. (OR)
However, US election uncertainty and a resurgence of COVID-19 cases in Europe and the US supported the dollar and gold prices as some investors sought safety.
Gold was firm at $ 1,895.6 an ounce while the () stayed at $ 94.027.
US Treasury bond yields barely changed as investors braced themselves for a busy week with central bank meetings from the Reserve Bank of Australia, the Federal Reserve and the Bank of England and the release of US employment data for October.