 |
 |
 |
 |
 |
 |
 |
 |
 |
|
Global Markets: Stocks Rise, Bonds Slide Wed Nov 3, 2004 SINGAPORE (Reuters) - Stocks and the dollar rose on Wednesday and bonds slid as President Bush edged toward re-election, but uncertainty over the result in the key state of Ohio kept investors in suspense. U.S. stock futures rose 1 percent and Asian shares darted to six-month highs after some television network projections showed Bush leading Democratic Senator John Kerry by 269 electoral votes to 207. European shares were expected to open higher after crucial projections that Bush had won in Ohio and Florida, which would put him just one Electoral College vote short of victory. But Kerry aides said they would not concede Ohio until all votes were counted, and even without the state he could still clinch a 269-269 tie that would throw the race to the Republican-led House of Representatives. "I think the equity market always felt Bush was its friendly candidate," partly because of concern Kerry would reverse Bush's tax cuts, said Charles Gabriel, head of Washington research at Prudential Securities. U.S. oil prices soared above $50 a barrel, with some analysts saying a Bush win could fuel nervousness about U.S. policy in the oil-producing Middle East, particularly Iran. Treasury prices slid on expectations a Republican win would be good for stocks, with Bush generally considered more friendly to big business. Relief that there was unlikely to be a repeat of the delayed 2000 election result also boosted markets "Bush is positive for shares and the dollar and, because of his fiscal policy, bad for bonds," said Heino Ruland at Frankfurt broker Steubing. "The political uncertainty is gone for now and markets can re-focus on macro-economic data and trends." UNCERTAINTY GONE Future prices for the S&P 500 stock index and the Dow Jones industrial average were up 1 percent, while Nasdaq 100 futures gained 1.4 percent. The benchmark 10-year note fell 25/32 in price for a yield of 4.15 percent, up from 4.08 percent on Monday. "I'd say with Ohio that it has gone Bush's way and I'd expect a rally across the board when the U.S. and European markets open as clouds of uncertainty have been blown away," said Will Armitage, senior quoting dealer at spread betting firm IG Index. "If he's in there's certainty -- and the markets hate uncertainty." As the results rolled in during the Asian trading day, an MSCI index of Asia-Pacific shares outside Japan rose 1.3 percent to its highest level since mid-April. The Tokyo market was closed for a holiday. The euro eased to $1.2695 in trade thinned by the holiday in Japan from $1.2725 in New York. The dollar edged up almost half a yen to around 106.45 yen. "It's looking like the evening could produce a clear winner. I would think that as a decisive election victory comes into focus tonight that the market becomes increasingly confident about taking the euro back to $1.25," said Michael Woolfolk, currency strategist at Bank of New York. OIL SWINGS HIGHER AS KERRY TRAILS U.S. light crude was up $1.26 cents at $50.88 a barrel after closing under $50 on Tuesday for the first time since Oct. 4. Analysts say a victory for Kerry would mean cheaper oil as he has said he would stop filling U.S. strategic reserve at current high prices and encourage more fuel efficiencies. In Asian stock trade, benchmark indices rose half a percent in Hong Kong and 1 percent in Singapore. Benchmarks gained 1.8 percent in Taiwan, 1.5 percent in South Korea and 0.9 percent in Australia, where the market hit the latest in a long string of record highs. Spot gold dipped to $419.50 an ounce from $420.00 in New York as the firmer dollar made the metal more expensive for holders of other currencies European stocks were poised to build on six-month highs scored on Tuesday. Financial bookmakers in London expected Britain's FTSE 100 stock index to open 25 points higher, Germany's Xetra DAX to trade 27-28 points stronger and France's CAC-40 to add 9-16 points. "It's a better-the-devil-you-know sort of approach and reduces the uncertainty," Nigel Cobby, managing director of European equities at J.P. Morgan, said on the expected Bush victory. "From a sentiment point of view, the biggest rally will be in pharmaceuticals as that was perceived to be the biggest loser from a Kerry point of view," he said.
|
