Markets cheer Clinton’s performance in debate
> Stocks, high-risk currencies stage a relief rally as investors hail her as victor over Trump
HONG KONG: Financial markets cheered Hillary Clinton’s performance in the first US presidential debate yesterday, with stocks and high-risk currencies staging a “relief rally” as investors hailed her as the victor over Republican rival Donald Trump.
Key Asian bourses got a bounce as a confident Clinton bested her rival in the 90-minute showdown, some reversing earlier declines.
Tokyo closed 0.8% up, a dramatic volte-face from its 0.9% drop at the open, while Sydney also trimmed early losses.
Hong Kong opened 0.5% higher but jumped in the afternoon to close more than 1% higher. Shanghai was up 0.6% by the close after being flat most of the day. Seoul, Bangkok and Singapore also gained.
“US futures have moved ahead as the debate unravelled, and I think that is one of the factors” for Asian markets erasing losses, Michael McCarthy, a chief market strategist at CMC Markets told Bloomberg News.
“In policy terms, no doubt to Clinton; in emotional and tone terms, Clinton is also ahead at this stage. She is winning on both counts would be my current assessment.”
On forex markets, the safe-haven yen dropped, while emerging-market and other currencies surged as traders moved back into riskier assets.
The Mexican peso rebounded off a record low, rocketing nearly 2% to 19.5047 against the US dollar.
The unit had slumped ahead of the debate as the prospect of a Trump presidency fanned concerns about the Republican candidate’s pledge to renegotiate the North American Free Trade Agreement if he wins.
“The peso, Canadian dollar... and Australian dollar are all surging – very much a relief rally in risk assets,” said Sean Callow, a senior currency strategist at Westpac Banking Corp in Sydney, according to Bloomberg.
“In FX markets, the most obvious trade to anticipate a Trump presidency is to short the peso.”
Angus Nicholson, a Melbournebased market analyst at IG Ltd agreed that the market swing was possibly a reflection of Clinton doing well.
“Trump is largely regarded as a market negative and certainly him doing quite poorly in the debate would reassure a lot of investors. But it’s early days,” he told Bloomberg.
Oil reversed Monday’s gains, with eyes on a producers’ meeting in Algeria. Members of the Organisation of Petroleum Exporting Countries (Opec) will meet today with key producer Russia, on the sidelines of the International Energy Forum.
“The markets are waiting for more news out of Algeria. Trading has been thin so what we’re seeing is mostly early-morning profit taking in Asia,” OANDA senior market analyst Jeffrey Halley told AFP.