Left Menu
Development News Edition

GLOBAL MARKETS-World stocks, Wall Street surge after US vote but dollar takes hit

World stocks rose on Wednesday, with Wall Street surging after the U.S. midterm election a day earlier divided control of Congress, but the outcome, which casts doubt on further U.S. tax cuts, hit the dollar and sent Treasury yields lower.

The Democrats looked headed for a gain of more than 30 seats in the House of Representatives, well beyond the 23 they needed to claim their first majority in eight years. With President Donald Trump's Republican party holding on to its Senate majority, the results from Tuesday's election were in line with expectations.

While gridlock in Washington could hamper Trump's political and economic agenda, few expect a reversal of tax cuts and financial deregulation measures that have already been enacted.

That view helped all three Wall Street equity indices open stronger. The Dow Jones Industrial Average rose 213.04 points, or 0.83 percent, to 25,848.05, the S&P 500 gained 27.55 points, or 1.00 percent, to 2,783 and the Nasdaq Composite added 84.49 points, or 1.15 percent, to 7,460.45.

"The good news in a way for markets is that there was an uncertainty that's now been removed. We know where we stand for the next two years, and investors will focus back on the fundamentals, which are (company) earnings growth and the economy," said Guy Miller, chief market strategist at Zurich Insurance Group.

Interactive chart on U.S. midterms https://tmsnrt.rs/2D6XH9t

Still, a split Congress could hamper Trump's push for a further round of tax cuts and deregulation, measures that have turbocharged the U.S. economy, stock markets and the dollar.

After volatile Asian trade, where stocks and the dollar swung on the Republicans' fluctuating prospects, the pan-European STOXX 600 index rose 1.02 percent and MSCI's gauge of stocks across the globe gained 0.90 percent.

It was the seventh straight day of gains in global shares.

Riskier European bonds such as those from Italy also were in demand, with yields falling 6-9 basis points.

The Fed is expected to signal this week that an interest rate rise remains on the agenda for December.

"Certainly it is now unlikely we will see additional fiscal stimulus in the near-term, that's a profound change but there will be no repeal of what's already in place," Miller said.

That view pushed the dollar lower against a basket of currencies. The dollar index fell 0.48 percent, with the euro up 0.32 percent to $1.1462.

Ten-year U.S. Treasury bond yields at one point fell to a low of 3.176 percent as it became clear that more fiscal stimulus was unlikely.

An initial knee-jerk rise to 3.25 percent came after early reports of a better-than-expected performance by the Republicans, but that move soon fizzled as results trickled in.

"Democrats winning the House is likely to mean slightly less fiscal stimulus going forward. The bond market may take that well because the Federal Reserve will have less work to do," said Richard Buxton, head of UK equities at Merian Global Investors.

Benchmark 10-year notes last rose 6/32 in price to yield 3.193 percent, from 3.215 percent late on Tuesday.

Attention will focus on Trump's hard line on trade tariffs, which he can impose without Congressional approval. That keeps alive worries about a trade war between China and the United States.

Chinese shares closed 0.7 percent lower, while Hong Kong markets ended just above flat.

The dollar's weakness lifted other currencies. The Japanese yen strengthened 0.11 percent versus the greenback at 113.32 per dollar, while sterling was last at $1.314, up 0.33 percent on the day.

Oil prices reversed their earlier decline after a report that Russia and Saudi Arabia were discussing output cuts in 2019 .

U.S. crude rose 0.69 percent to $62.64 per barrel and Brent was last at $72.83, up 0.97 percent on the day.

(Additional reporting by Hideyuki Sano in Tokyo; Tomo Uetake and Daniel Leussink in Tokyo, Daniel Bases in New York, Josephine Mason, Sujata Rao and Dhara Ranasinghe in London; Editing by Bernadette Baum)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

Download The Devdiscourse News App for Latest News.



Future of Food: Technology fostering the road to global food security

Technological innovation can help address most of the pressing issues facing the world today including food security by enhancing productivity, improving financial services, managing resources, addressing environmental concerns, etc....

Conspiracy theories on COVID 19: Legislators, Scientists, and Journalists all joined the Caravan

Conspiracy theories are not new for virus epidemics. There have been conspiracy theories on HIV-AIDS, Polio Vaccines, Ebola Virus, and several other diseases as well. However, what makes the 2019 Novel Coronavirus different from others is ...

Now it’s a war, Uganda deploys army to combat locust swarms

Its for the first time after 1986, the locust swarms have attacked Uganda twice in a season. With the increasing number of countries of Africa under attack by locust swarms, the problem seems to have taken a regional paradigm. Its very diff...

Top 10 Fake News, Myths and Realities on 2019 Novel Coronavirus COVID 19

With nearly 1500 deaths by January 14 and around 65,000 infections in China, the Novel Coronavirus 2019 has become one of the worst health epidemics of the 21st Century. However, 8,573 people have been cured but the rumor mongers are a...


Latest News

South Korea confirms 70 more coronavirus cases, total 833: KCDC

South Korea confirmed 70 more novel coronavirus cases Monday afternoon, bringing its tally to 833, by far the largest national total outside China.The updated figures on the website of the Korea Centers for Disease Control and Prevention KC...

It's time for Australian businesses to develop long-term relations with India: minister

Australia is open for business with India and it is time for the Australian businesses to develop long-term relations with the Indian partners, a senior minister has said. Minister for Trade, Tourism and Investment Simon Birmingham, who is ...

Iraqi nurse spends her weekends stitching wounds at protest site

Hannaa Jassem bends over a patient in a makeshift clinic on the edge of Baghdads Tahrir Square, one of a handful of women in an overwhelmingly male world of demonstrations and political confrontation.The 24-year-old works as a nurse in a ho...

Suspects arrested for stealing diesel from Transnet

Two suspects have been arrested for allegedly stealing diesel from a Transnet pipeline in Delmas, Mpumalanga.The two were arrested on Friday and will appear before the Delmas Magistrates Court today.Captain Dineo Lucy Sekgotodi said the two...

Give Feedback