Caution reigns ahead of US election

PUBLISHED : Tuesday, 06 November, 2012, 3:10pm
UPDATED : Tuesday, 06 November, 2012, 3:16pm

Share

Asian markets were mixed on Tuesday in cautious trade as investors awaited the outcome of the knife-edge US presidential election, while concerns over the euro zone returned to the fore.

Eyes are also on the start this week in China of the Communist Party’s 18th congress, which will see a once-in-a-decade leadership transition.

Tokyo softened 0.36 per cent, or 32.29 points, to 8,975.15, Seoul rose 1.05 per cent, or 19.95 points, to 1,928.17 and Sydney closed 0.24 per cent, or 10.7 points, higher at 4,484.8.

In afternoon trade Hong Kong slipped 0.27 per cent and Shanghai eased 0.56 per cent.

The US poll sees President Barack Obama and his Republican challenger Mitt Romney neck-and-neck, leaving markets in a tight band as traders hold off making any bets until the outcome is known.

“Players remain on edge, as the outcome is simply too close to call,” said Hiroichi Nishi, general manager of equities at SMBC Nikko Securities.

Wall Street closed slightly higher on Monday.

The Dow gained 0.15 per cent, the S&P 500 advanced 0.22 per cent and the Nasdaq added 0.59 per cent.

A downbeat set of data on activity in the US services sector weighed on sentiment in New York.

The Institute for Supply Management reported its purchasing managers index for the non-manufacturing sector dropped to 54.2 in October from 55.1 in September. Most analysts had forecast a decline to 54.5. Anything above 50 is considered growth while anything below is seen as a contraction.

In Europe an official said finance ministers of the 17-nation euro zone were unlikely to make a formal decision on the instalment batch of crucial bailout cash for Greece next week, despite the fact Athens is likely to run out of money this month.

Athens will hold crucial votes this week on a fresh round of austerity demanded by international lenders, while the country is gripped by a new wave of strikes.

The global uncertainty weighed on the euro, which fell to its lowest level in two months against the dollar during New York trade.

The euro bought US$1.2793 in afternoon Asian trade against US$1.2791 late on Monday in New York, where it had briefly hit US$1.2767, its weakest since September 11.

The euro also fetched 102.42 yen against 102.69 yen, while the dollar was trading at 80.05 yen against 80.28 yen.

And the Australian dollar rose to US$1.0430 from US$1.0359 on Monday after the country’s central bank said it would keep interest rates on hold.

 

Promotions

 
 
 

You may also like