Asian stocks rise as investors see Clinton with upper hand

Asian stocks advanced, erasing losses as US futures rose, with investors viewing Democratic candidate Hillary Clinton as having got the upper hand in the first US presidential debate that pitted her against Republican hopeful Donald Trump.

The MSCI Asia Pacific Index rose 0.2 per cent to 141.15 as of 12.39pm in Tokyo after sliding as much as 0.9 per cent earlier, as S&P 500 Index futures climbed 0.6 per cent.

The Topix index wiped out a drop of as much as 1.7 per cent and gained 0.2 per cent.

In a little more than 90-minute face-off, Mr Trump and Mrs Clinton sparred on several key issues including foreign policy, trade, taxes, Islamic State and nuclear weapons.

“US futures have moved ahead as the debate unravelled, and I think that is one of the factors” for Asian markets erasing losses, Michael McCarthy, a chief market strategist at CMC Markets. “In policy terms, no doubt to Clinton; in emotional and tone terms, Clinton is also ahead at this stage. She is winning on both counts would be my current assessment.”

Risk-averse

While investors had become more risk-averse ahead of the US debate, partly due to a rout in shares of Deutsche Bank, stocks pared declines and the yen weakened as it progressed. Mrs Clinton and Mr Trump levelled sharp and personal charges and counter-charges over trade, the US economy, race and foreign policy, showcasing their different personalities and visions of the nation's future.

“It’s possibly a reflection of Clinton doing quite well,” Angus Nicholson, a Melbourne-based market analyst at IG Ltd, said. “Trump is largely regarded as a market negative and certainly him doing quite poorly in the debate would reassure a lot of investors. But it’s early days in the debate. Everyone is glued to it.”

A rally in Asian stocks after the US decided to keep interest rates unchanged and the Bank of Japan tinkered with its monetary stimulus fizzled out before the debate as investors scaled back bets and sought safe havens, spurring bond gains. A sell-off in bank stocks added to risks for global investors already anxious about the outcome of the US election and a meeting of oil producers this week.

Regional indices

South Korea’s Kospi index reversed an earlier decline to trade 0.6 per cent higher. Australia’s S&P/ASX 200 index was down 0.5 per cent. New Zealand’s SandP/NZX 50 index fell 0.5 per cent. Hong Kong’s Hang Seng index rose 1 per cent after losing 1.6 per cent Monday.

The Shanghai Composite index fell 0.2 per cent, adding to a 1.8 per cent drop in the previous session amid increased volatility before Chinese financial markets shut next week for a week-long holiday.

Financial markets and offices in Taipei are closed on Tuesday as Typhoon Megi approaches Taiwan.

US crude prices declined 0.1 per cent during Asian trading, paring some of Monday’s gains as hopes of a deal to reduce production receded. Saudi Arabia offered to pump less crude if Iran capped its output, even as both countries failed to reach an agreement after two days of preparatory talks in Vienna, according to sources familiar with the negotiations. – (Bloomberg)