Wall Street’s main indexes rebounded, London dipped 0.1%, Paris and Frankfurt closed the day with modest gains, while equities in Shanghai and Hong Kong won strong support from hopes over China’s economy
Major stock markets mostly gained and the dollar remained under pressure Tuesday amid closely contested U.S. presidential election.
Wall Street’s main indexes, which had dropped the previous day, rebounded after voting began in the U.S.
In Europe, London dipped 0.1% as investors await an interest-rate decision by the BoE on Thursday while Paris and Frankfurt closed the day with modest gains.
Equities in Shanghai and Hong Kong won strong support from hopes over China’s economy.
The dollar softened against the euro, the British pound and the yen.
Forecasters have for weeks pointed to a neck-and-neck contest between Vice President Kamala Harris and former president Donald Trump.
A win for Trump is expected to stoke inflation and send Treasury yields higher owing to his pledges to cut taxes and impose tariffs on imports, which could push up the dollar.
Analysts see less upheaval from a win by Democratic Vice President Harris.
A pro-tariff Trump presidency could see the dollar strengthen amid concerns higher inflation will prompt the Federal Reserve to keep interest rates higher, predicted Matt Britzman, senior equity analyst at Hargreaves Lansdown.
There is likely to be a period of volatility especially if the result is contested, but investors should keep their eyes on long-term horizons as historically financial markets have gained over the course of both Democratic and Republican presidencies, he said.
Fawad Razaqzada, analyst at City Index and Forex.com, said that traders are not committing to any particular direction across financial markets, and you can’t really blame them.
Given that the race seems to be a toss-up “this makes it extremely difficult to make a strong case for the direction of the dollar or stocks this week,” he said.
Investors are also awaiting another US Fed rate cut on Thursday as inflation eases.
