Global equities surge as FBI clears Clin­ton

Kuwait Times - - BUSINESS -

Global equities re­bounded sharply yes­ter­day, the eve of the US pres­i­den­tial elec­tion, af­ter the FBI handed mar­ket fa­vorite Hillary Clin­ton a ma­jor boost by rul­ing out crim­i­nal charges.

Asian and Eu­ro­pean equities surged higher as traders breathed a sigh of re­lief as FBI chief James Comey said Demo­cratic nom­i­nee Clin­ton would not face charges over her use of a pri­vate email server, deal­ing a blow to her Repub­li­can ri­val Don­ald Trump.

In Eu­ro­pean deals, Frank­furt stocks won 1.5 per­cent, Lon­don added 1.3 per­cent and Paris jumped 1.7 per­cent in value. The Mex­i­can peso-which has taken on an in­verse re­la­tion­ship with Trump’s pres­i­den­tial prospects-staged a stun­ning rally against the dol­lar to re­coup all its losses from last week.

The cur­rency is con­sid­ered a re­flec­tion of Trump’s chances be­cause of his anti-Mex­i­can rhetoric-in­clud­ing his pledge to re­move un­doc­u­mented mi­grants, build a bor­der wall and tear up a trade deal. “Eu­ro­pean eq­uity mar­kets are... boosted by the news that the FBI has not changed its con­clu­sion on the Hillary Clin­ton email in­ves­ti­ga­tion af­ter an­nounc­ing a lit­tle over a week ago that it had been re­opened,” said Oanda an­a­lyst Craig Er­lam. “The tim­ing of FBI di­rec­tor James Comey’s dis­clo­sure has once again dealt a se­ri­ous blow to Don­ald Trump’s chances of se­cur­ing the White House, some­thing the mar­kets have re­sponded very pos­i­tively to.”

Mar­kets were plunged into tur­moil on Oc­to­ber 28 when Comey re­vealed that mes­sages linked to Clin­ton were be­ing in­ves­ti­gated, send­ing Trump surg­ing in opin­ion polls just days be­fore the Novem­ber 8 vote.

How­ever, Comey on Sun­day an­nounced he would not change his July rec­om­men­da­tion that Clin­ton not be pros­e­cuted for al­legedly putting US se­crets at risk. In­vestors be­came more will­ing Mon­day to hold as­sets that are deemed to carry a higher risk-like equities. “The dark clouds seem to be dis­si­pat­ing on news that FBI sent a let­ter to Congress cit­ing that Hillary Clin­ton had not com­mit­ted a crime with her pri­vate server,” said Lon­don Cap­i­tal Group an­a­lyst Ipek Ozkardeskaya.

“The FBI news trig­gered a risk rally across the global fi­nan­cial mar­kets.” For­mer sec­re­tary of state Clin­ton is con­sid­ered by many in­vestors to be a safer bet than Trump, who is seen as a loose can­non with poli­cies many fear could wreck the world’s top econ­omy.

“The US elec­tion is all that mat­ters,” Ozkardeskaya added. “The out­come of the US pres­i­den­tial elec­tion is im­por­tant for the global mar­kets, as the new US pres­i­dent will set the tone for the world’s most pow­er­ful econ­omy’s ex­ter­nal pol­i­tics and trade re­la­tions for the next four years.

“In this con­text, the Repub­li­can Party nom­i­nee Don­ald Trump’s vic­tory could be ex­pected to hit the busi­ness sen­ti­ment across the global mar­kets, hence is de­fined as a ma­jor, world-wide risk from a mar­ket per­spec­tive head­ing into Tues­day’s elec­tion.”

Asia stocks re­bound

Asian equities staged a re­bound and the Mex­i­can peso ral­lied yes­ter­day as traders breathed a sigh of re­lief af­ter the FBI chief said mar­ket fa­vorite Hillary Clin­ton would not face charges over her use of a pri­vate email server.

Tokyo’s Nikkei ended 1.6 per­cent higher while Hong Kong was up 0.5 per­cent in the af­ter­noon, with bank­ing gi­ant HSBC more than two per­cent higher af­ter it re­ported a fore­cast-beat­ing rise in pre-tax profit. Shang­hai closed up 0.3 per­cent, Syd­ney added 1.4 per­cent and Seoul gained 0.8 per­cent, while Welling­ton soared 2.4 per­cent and Sin­ga­pore put on 0.5 per­cent.

Shares in Hong Kong de­vel­op­ers were bat­tered yes­ter­day af­ter the city’s lead­ers raised stamp duty to try to cool run­away home prices.

The gov­ern­ment slapped a 15 per­cent tax on all res­i­den­tial pur­chases, al­most dou­ble the pre­vi­ous 8.5 per­cent, ex­cept for first-time buy­ers who are per­ma­nent res­i­dents.

Home prices re­main out of reach for most of the city’s seven mil­lion res­i­dents, de­spite a se­ries of mea­sures by the gov­ern­ment. “Prop­erty risks have been in­creas­ing with the rapid surge of prices and trans­ac­tions,” Fi­nan­cial Sec­re­tary John Tsang said Fri­day when an­nounc­ing the move.

“We have to pre­vent the risk of a prop­erty bub­ble from wors­en­ing, which in turn can threaten our econ­omy and even the sta­bil­ity of the fi­nan­cial sys­tem.” An­a­lysts said the move would hurt the city’s prop­erty firms. “The ac­tion is likely to have an im­me­di­ate im­pact on the mar­ket, with turnovers and prop­erty prices ob­vi­ously pres­sured in a short pe­riod,” said Willy Liu at Ri­ca­corp Prop­er­ties. “Small and medi­um­sized prop­er­ties will be among the first to bear the brunt.”

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