US election jitters push Asian shares lower

MOST Asian markets dropped more than 1 percent after Wall Street’s ‘fear index’ spiked on jitters over the US presidential elections, CNBC said today.

“Markets have been rankled by some polls putting Trump ahead of Clinton for the first time, given Trump’s controversial policy platform of re-looking at trade deals and clamping down on immigration,” Chang Wei Liang, FX strategist at Mizuho Bank, said in a Wednesday note.

Australia’s ASX 200 closed down 1.16 percent, or 61.47 points, at 5,229 dragged by its energy subindex, which was down 1.81 percent, and its financials subindex, which fell 1.43 percent.

Japan’s Nikkei 225 ended down 1.76 percent, or 308.07 points, at 17,134.68, likely due to the stronger yen which is seen as a safe haven currency. The yen strengthened against the greenback, fetching 103.86 a dollar as of 1:57 pm HK/SIN, compared to 104 levels seen on Tuesday.

In South Korea, the Kospi closed down 1.42 percent, or 28.45 points, at 1,978.94. Hong Kong’s Hang Seng shed 1.44 percent as of 3:09 pm local time.

Mainland China’s Shanghai composite was down 0.62 percent, or 19.48 points, at 3,102.97, while the Shenzhen composite slipped 0.63 percent, or 13.06 points, at 2,060.05.

In Thailand the Stock Exchange of Thailand main index dipped by 5.87 points or 0.39% to close at 1,498.65 points with total transaction value of 49.339 billion baht. The SET50 index closed at 937.75 points, down 4.81 points, with total transaction value of 26.483 billion baht. However the Mai Index edged up by 1.67 points to close at 580.72 with total transaction value of 2.656 billion baht.

The Dow Jones industrial average closed down 0.58 percent at 18,037.1, the S&P 500 ended 0.68 percent lower at 2,111.72, and the Nasdaq composite closed down 0.69 percent at 5,153.58, after a choppy day in which better-than-expected earnings failed to cancel out worries about the US election.

The CBOE Volatility Index (.VIX), called the ‘fear index’ because it shows the market’s expectations on volatility over a 30-day period, went above the key 20 point during US trading, taking its rise to more than 40 percent over the past six days.

It is the first time the VIX has risen for six straight days since the period just before the UK’s shock vote to leave the EU, and traders told CNBC the latest climb was due to the increased possibility of a Donald Trump presidency.

It’s been a bruising few days for Trump rival Hillary Clinton, after the FBI said it was investigating new emails related to her controversial use of a private server while she served as secretary of state.

The Federal Reserve will finish its two-day meeting on Wednesday in the US. The central bank is considered very unlikely to hike at the meeting, according to the CNBC Fed Survey, which found that 100 percent of respondents did not expect a move, but 86 percent did forecast a quarter-point hike at the December 13-14 meeting.

“Even if the Fed does signal an inclination to lift rates in December, markets will take the view that this is unlikely if a Trump victory leads to uncertainty and a surge in financial market volatility. This view was played out in markets last night with the US dollar falling sharply and gold rallying,” said Ric Spooner, chief market analyst at CMC Markets, in a Wednesday note.

Spot gold traded at $1,293.02 per ounce, compared to last week’s levels as low as $1,266.

In currency markets, the dollar index, which tracks the greenback against a basket of currencies, stood at 97.696 as of 3:12 pm HK/SIN, down from 98 levels on Tuesday.

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Top: Traders on the floor of New York Stock Exchange. Photo:Thetaxhaven (CC-BY-2.0)

Source: CNBC’s Aza Wee Sile and ThaiResidents.com