Stocks in Asia, Europe surge on Biden election win, yuan extends strongest level since June 2018
- Hang Seng Index gained 1.2 per cent to a four-month high, while stocks in Europe and US are also cheering Biden’s victory
- Shanghai Composite Index rose to a two-month high, yuan reaches the strongest since June 2018
The Hang Seng Index rose 1.2 per cent to 26,016.17, its highest level since July 9. The Shanghai Composite Index closed at a two-month high after adding 1.9 per cent. The yuan appreciated 0.6 per cent to 6.5734 per dollar, a level not seen since late June 2018.
Bulls also waded into European stock markets. Major benchmarks surged on a wave of optimism over Biden’s victory and news that drugmakers Pfizer and BioNTech were making good progress with their Covid-19 vaccine.
The FTSE 100 in London vaulted more than 5.6 per cent, while Germany’s DAX jumped 5.6 per cent and France’s CAC 40 climbed more than 7.3 per cent.
Dow futures were last up 1,272 points, or about 4.5 per cent, while S&P 500 futures climbed 3.5 per cent and Nasdaq futures were up 1.5 per cent.
“The markets welcome Biden becoming the next US president,” said Louis Tse Ming-kwong, managing director of Wealthy Securities. “Sentiment has greatly improved. But the market is very much overbought. We have to be careful as large profits have been accumulated over the past couple of weeks.”
Regional stock markets logged huge gains with the Nikkei 225 ahead at 2.1 per cent. South Korea’s Kospi gained 1.3 per cent, while Australia’s S&P/ASX 200 rose 1.8 per cent. They followed a 6.3 per cent surge in the MSCI Asia-Pacific Index last week, the most in a month, before the US vote was called.
“Emerging market (EM) assets should perform on improved trade sentiment, we believe, especially in Asia ex-Japan,” BlackRock Inc, the world’s biggest money manager, said in a note on Sunday. “Risks to the outcome appear remote, and we prefer to look through any market volatility that legal challenges by President Trump may bring.”
The Hang Seng Tech Index of 30 stocks advanced 3 per cent. Sunny Optical, which produces phone lenses, rose 8.1 per cent, while AAC Technology gained 4.9 per cent. Alibaba, the owner of this newspaper, rose 2.9 per cent to HK$290.20, while Tencent gained 1.3 per cent to HK$622.50.
Chinese chip makers rose. Semiconductor Manufacturing International Corporation (SMIC) rose 2.5 per cent, while Hua Hong Semiconductor added 2.8 per cent. In China, a gauge tracking the local chip-making industry gained 4.8 per cent, according to Xuangubao.cn. Wuxi Chipown Micro-electronics gained 20 per cent to fire up the Shanghai Composite Index.
Three stocks started trading in Hong Kong and Shanghai after their initial public offerings (IPOs).
New Oriental Education & Technology Group, which provides private educational services in China, gained 14.7 per cent to HK$1,365 from its offer price of HK$1,190 on the first day of its secondary listing in Hong Kong. Chinese biopharmaceutical company RemeGen also gained 34 per cent to HK$69.80 from its IPO price of HK$52.10.
In Shanghai, Dalian Haosen Equipment Manufacturing, which makes factory automation equipment, surged 291.6 per cent to 79.10 yuan from its offer price of 20.20 yuan.
