Asian markets rally on FBI announcement
ASIAN equities staged a rebound and the Mexican peso rallied yesterday as traders breathed a sigh of relief after the FBI chief said market favourite Hillary Clinton would not face charges over her use of a private email server.
Investors were sent into a funk last week after James Comey said messages linked to the Democratic presidential nominee were being investigated, sending rival Donald Trump surging in opinion polls just days before today’s vote.
The former secretary of state is considered by most investors to be a safer bet than Mr Trump, who is seen as a loose cannon with policies many fear could wreck the world’s top economy.
However, Mr Comey on November 6 announced he would not change his July recommendation that Ms Clinton not be prosecuted for putting US secrets at risk.
“Markets are likely to remove some of the risk premium taken as a precaution against a Trump victory now that Hillary Clinton will not be charged over her use of a private email server,” said CMC Markets chief analyst Ric Spooner.
“However, an element of uncertainty remains over this election. It seems unlikely that markets will make a full ‘risk on’ move until Clinton is declared the winner.”
Tokyo’s Nikkei ended 1.6 percent higher while Hong Kong closed up 0.7pc, with banking giant HSBC more than 2pc higher after it reported a forecast-beating rise in pre-tax profit.
Shanghai closed up 0.3pc, Sydney added 1.4pc and Seoul gained 0.8pc, while Wellington soared 2.4pc and Singapore put on 0.5pc.
The news also provided strong support for the Mexican peso, which soared more than 2pc against the dollar yesterday, having been battered last week.
The peso is considered a proxy for Mr Trump’s chances because of his anti-Mexican rhetoric throughout the campaign – including his pledge to remove undocumented migrants, build a border wall and tear up a trade deal.
Also helping stocks was a solid US October jobs report which gave the Federal Reserve fresh ammunition to raise rates in December, while the bank’s vice chair Stanley Fischer said the labour market was in a “powerful” recovery and inflation was picking up.
The dollar rallied on the FBI news, breaking back above 104 yen while also ticking back up against the pound.
Sterling surged last week after the London court ruling that the British government would need parliamentary approval to officially move to pull out of the European Union. –
James Comey says Hillary Clinton will not face charges.