Global stock prices slipped and U.S. bond yields rose on Wednesday as investors braced for the prospect that Democrats could win both races in a U.S. Senate run-off election in Georgia, handing them control of the crucial chamber.
"Having control over both the legislative and executive branches could theoretically lead to sweeping changes to policy," said Vasu Menon, investment strategy executive director at OCBC Bank. Other industries, such as banks, oil and gas and healthcare, could come under heavier scrutiny, while infrastructure and alternative energy sectors could benefit.
"A market pullback seems both reasonable and healthy. But stocks won't plunge to zero because there is a countervailing positive here," said Phil Orlando, Chief Equity Market Strategist, Federated Hermes of a potential Democratic sweep. Shanghai stocks extended gains on Wednesday, with the CSI300 index rising 0.5% to reach its best levels since 2008.
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