Shares rise with Democratic Senate victory, founding dollar

SINGAPORE / NEW YORK (Reuters) – Bonds fueled losses and Asian stock markets soared on Thursday, in anticipation of heavy debt and heavy spending by the Democratic government boosting growth after the second round of elections that gave the party control of the two houses of the US Congress.

U.S. Treasury bills fell the most in months, and the S&P 500 index hit a record high after Democratic victories in two contests in Georgia gave them close control of the Senate and the power to approve their agenda.

MSCI’s broadest Asia Pacific stock index outside Japan rose 0.5% to just shy of a record, led by jumps of more than 1.5% at South Korea’s chip maker Kospi and ASX 200, from Australia, mining and banking.

Japan’s Nikkei rose 2% to its highest value since 1990. S&P 500 futures rose 0.6% and Nasdaq 100 futures rose 0.9%, as markets seemed to be getting rid of the end of the New York session when Chaotic protests in Washington angered traders. [.N]

“It’s basically a reflective deal,” said Mathan Somasundaram, head of Sydney’s Deep Data Analytics research firm, who added that the Democratic sweep was unexpected by most investors and “changes a lot.”

“Even though it is a very thin margin, it gives Democrats a two-year window (to pursue their agenda),” he said. “Anything that benefits from rising prices will perform well … when you look at the policy settings they’re trying to go through, it’s about printing (money for) Main Street and not Wall Street.”

Georgia voters elected the first black senator in state history, Raphael Warnock, and the youngest member of the Senate, Jon Ossoff. Along with Vice President Kamala Harris’ tie-break vote, the victories allow Democrats to control the chamber.

The subsequent sale of bonds pushed the yield on 10-year US Treasury bonds to more than 1% for the first time since March. It stabilized at 1.0422% on Wednesday. [US/]

The US dollar also plummeted as the result became clearer, because currency traders recognize that the large and growing US budget and trade deficit will weigh on the dollar. [FRX/]

The dollar hit a nearly three-year low against the euro of $ 1.2349 and hovered close to that level on Thursday. It also dropped to several-year lows against Aussie, kiwi and Swiss franc.

CAPITOL CHAOS, CHINA CRACKDOWN

The exuberance was tempered by a sale of technology stocks, while investors expect the industry to face taxes and regulations, and by disturbing scenes of protesters breaking into the Capitol to interrupt the certification of Donald Trump’s electoral defeat.

Wall Street indices declined from session highs as the police evacuated lawmakers and struggled for more than three hours to clean up Trump supporters on Capitol Hill.

“What gives us a little break is that the economy is still very fragile and I think it is unlikely that Democrats will have a time as easy as the markets are trying to predict the approval of some of these policies,” said Tim Chubb, chief investment officer for the consultant. Girard Fortune in Pennsylvania.

Since then, Congress has met again to resume electoral certification. Twitter shares fell slightly after hours, when the social network said it had temporarily blocked Trump’s account for violating the platform’s rules.

Meanwhile, the U.S. crackdown on Chinese companies appears to be deepening, with sources telling Reuters that the Trump administration is considering extending investment bans to tech giants Alibaba and Tencent.

Both shares fell about 3% in Hong Kong and the shares of three Chinese telecommunications companies that the New York Stock Exchange eventually decided to withdraw after a week of unexpected changes also fell sharply.

Oil prices hovered close to a 10-month high, heating up following a production cut promised by Saudi Arabia. Brent oil futures were up 0.5% to $ 54.60 a barrel, and American oil futures were up 0.8% to $ 51.02 a barrel.

Gold remained stable at $ 1,916 an ounce and bitcoin, after breaking a new record of $ 37,400.