Asian Stock Market Update

Overview

Most Asian stocks advanced on Wednesday, following a strong performance in Wall Street. Chinese markets experienced volatility as early vote counting indicated Donald Trump's lead in the 2024 presidential elections.

Wall Street Influence

Regional markets reflected the overnight rally on Wall Street, driven by a rebound in heavyweight technology stocks. Investors positioned for an anticipated interest rate cut by the Federal Reserve this week.

U.S. stock index futures rose in Asian trade. As reported by the Associated Press, Trump garnered 210 electoral votes compared to Kamala Harris's 113 votes by 22:48 ET (03:48 GMT).

Chinese Markets React

Stock Performance

China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes saw early gains diminish, trading flat to low. Meanwhile, Hong Kong's Hang Seng index fell by 2.2%.

Trump's promise of steep trade tariffs on China raises concerns about further economic pressure, especially as China faces persistent deflation and a protracted property market slump. Analysts predict increased losses for Chinese markets if Trump secures victory.

Political Developments

This week also highlights a meeting of China's National People's Congress (NPC), expected to outline plans for significant fiscal spending. Analysts estimate at least 10 trillion yuan ($1.4 trillion) in new spending over the coming years. Recent monetary stimulus efforts yielded minimal results.

JPMorgan analysts indicated that a Trump win could prompt Beijing to allocate more fiscal stimulus amid impending tariffs.

Japanese Market Surge

Performance Details

Japan's Nikkei 225 emerged as Asia's top performer, surging 1.8%, complemented by a 1.4% rise in the TOPIX index. The rally was fueled largely by export-oriented stocks as the yen weakened against the dollar ahead of the U.S. election results.

Stronger technology stocks contributed to the Nikkei's performance, inspired by their U.S. counterparts' overnight rally. Positive data from the services sector showed a smaller contraction than initially expected in October.

Broader Asian Market Sentiment

Overall, Asian markets displayed a positive trend with U.S. election outcomes and the Federal Reserve meeting drawing attention. Investors anticipate a quick election conclusion to reduce market uncertainty.

Australia’s ASX 200 rose by 1%, while South Korea’s KOSPI gained 0.1%. Futures for India’s Nifty 50 index suggest a flat opening, following a recovery from a four-month low on Tuesday.

Federal Reserve Meeting

This week, the Federal Reserve is expected to cut interest rates by 25 basis points.