Trump lead in poll rat­tles Asian mar­kets

> Eq­ui­ties sell-off spreads as US pres­i­den­tial race ri­val Hil­lary Clin­ton falls be­hind

The Sun (Malaysia) - - SUNBIZ -

HONG KONG: Asian eq­ui­ties tum­bled yes­ter­day, ex­tend­ing a global sell-off, and the Mex­i­can peso fell af­ter a poll showed Don­ald Trump over­tak­ing mar­ket favourite Hil­lary Clin­ton in the race for the White House.

With Clin­ton un­til last week com­fort­ably ahead, traders were up­beat about her chances of win­ning on Nov 8 but news Fri­day that the FBI were again look­ing at her emails has raised the prospect of Trump be­com­ing pres­i­dent.

Trump is viewed as a wildcard, in part be­cause of his harsh crit­i­cism of Fed­eral Re­serve chief Janet Yellen and in­ter­na­tional trade pacts.

“Since the FBI re­opened its case into Hil­lary Clin­ton’s emails last Fri­day, her sub­stan­tial lead in the polls has been dec­i­mated and some now even show Trump in the lead,” Craig Er­lam, a se­nior mar­ket an­a­lyst at OANDA, said in a note.

“It’s been clear for some time now that mar­kets would much pre­fer the sta­bil­ity that a Clin­ton vic­tory would bring for the US econ­omy and the re­ac­tion over the last 24 hours or so since the polls started to change so dra­mat­i­cally just con­firms this. Trump risk is well and truly be­ing priced in again.”

The news bat­tered mar­kets on Wall Street and in Europe, while the VIX volatil­ity in­dex, which is seen as a mea­sure of the US mar­ket’s fears, was sit­ting near lev­els last seen af­ter Bri­tain voted in June to leave the EU.

Those losses fil­tered through to Asia, where Tokyo closed 1.8% lower, while Hong Kong dived 1.4% in late trade and Shang­hai ended down 0.6%.

Syd­ney and Seoul each sank more than 1% and there were also sharp losses in Welling­ton, Manila and Taipei.

Cur­rency traders also took fright, flee­ing into the safe-haven yen. The green­back fell to ¥103.86 in Tokyo, down from ¥104.12 in New York and well off the lev­els of above ¥105 seen Tues­day.

An­a­lysts say a Trump win could also lead the Fed­eral Re­serve – which ended a pol­icy meet­ing yes­ter­day – to put off an ex­pected De­cem­ber in­ter­est rate hike ow­ing to wor­ries about his ef­fect on the econ­omy.

“Even if the Fed does sig­nal an in­cli­na­tion to lift rates in De­cem­ber, mar­kets will take the view that this is un­likely if a Trump vic­tory leads to un­cer­tainty and a surge in fi­nan­cial- mar­ket volatil­ity,” Ric Spooner, chief mar­ket an­a­lyst in Syd­ney at CMC Mar­kets, said in an email to clients, ac­cord­ing to Bloomberg News.

How­ever, the dol­lar was sharply up at 19.32 Mex­i­can pe­sos from 18.85 pe­sos Tues­day. The peso is con­sid­ered a proxy for Trump’s chances ow­ing to his anti-Mex­i­can rhetoric through­out the cam­paign in­clud­ing his pledge to re­move un­doc­u­mented mi­grants, build a wall and tear up a trade deal.

The green­back also ral­lied against higher-yield­ing, risker Asia-Pa­cific units, soar­ing 0.9% against the South Korean won and 0.5% ver­sus the Aus­tralian dol­lar.

A week-long re­treat in oil prices also ex­tended in Asia, with both con­tracts down al­most a tenth from re­cent highs as in­vestors grow wor­ried about the chances of suc­cess for Opec’s Septem­ber agree­ment to cut out­put. – AFP

AFPPIX

A pedes­trian walks in front of an elec­tron­ics stock dis­play in the win­dow of a se­cu­ri­ties firm in Tokyo yes­ter­day.

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