HONG KONG (MarketWatch) — Asian stock indexes ended higher on Wednesday following the reelection of U.S. President Barack Obama, with the incumbent’s victory seen as removing uncertainly, even as markets began looking ahead to U.S. fiscal-cliff issues and the relatively short seven-week period to tackle the problem.
A Second Obama Term
Laura Tyson, former chair of the Council of Economic Advisers, discusses how a second term for Barack Obama may shape budget negotiations.
Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.46% and Australia’s S&P/ASX 200 index /zigman2/quotes/210598100/delayed AU:XJO +0.43% both advanced 0.7%, while South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 +0.07% gained 0.5%.
Shanghai’s Composite Index /zigman2/quotes/206600939/delayed CN:000001 +0.26% ended little changed, falling 0.01%, while Japan’s Nikkei Stock Average /zigman2/quotes/210597971/delayed JP:NIK +0.89% also traded flat, ending 0.03% lower.
Singapore’s Straits Times Index was up 0.7% late in trading.
The Asia Dow rose 0.9%.
Chances for compromise
Citigroup said the Obama victory bolstered the likelihood of a temporary compromise in the debate over the expiry of tax concessions and other fiscal issues due to kick in at the end of the year.
“This outcome means that the same players remain in place for the upcoming fiscal-cliff negotiations,” Citi analyst Tina Fordham said in a note Wednesday. “Watch for statements from leaders of both parties in both houses of Congress, as well as the leaders of the Ways and Means and Finance Committees, as their signals matter most.”
Asian markets appeared to breathe a collective sigh of relief on news of the Obama victory, as an incumbent in the White House means U.S. trade and fiscal policies, are likely to continue, analysts said.
“Perhaps Asian traders are content to see the Democrats at the helm given [that] stock-market gains have been pretty good under Obama and the threat of economic sanctions by the Republican Party on China could have been a big risk-off event,” said Chris Weston, chief markets strategist at IG Markets.
U.S. stock futures were choppy on Wednesday. Dow Jones Industrial Average futures were down in Asian trading hours, recovered near the start of Europe’s day, and then turned lower again.
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Matthew Sherwood at Perpetual Investments said before the election that he was hoping for a “conclusive vote.”
Now the “hard work of negotiating a watering-down of the U.S. fiscal cliff between the U.S. Congress and President Obama gets under way, and they cannot afford to fail,” he said.
In Hong Kong, notable gainers included apparel firm Esprit Holdings Ltd. , /zigman2/quotes/205943307/delayed HK:330 0.00% /zigman2/quotes/209270177/delayed ESHDF -2.78% , up 5.5%, property firm New World Development Co. /zigman2/quotes/202357413/delayed HK:17 +0.19% /zigman2/quotes/207378574/delayed NDVLY -0.56% up 3.2%, and Cathay Pacific Airways Ltd. /zigman2/quotes/203532437/delayed HK:293 +1.36% , /zigman2/quotes/208114856/delayed CPCAY +2.14% up 1.3%.