Asian stocks perked up on Thursday as investors remained confident that violence in Washington would not disrupt a legitimate transition to a new presidency or derail political support for a U.S. economic recovery.
Supporting sentiment were Democratic wins in two closely watched U.S. Senate runoff elections in the state of Georgia on Wednesday, which swung the balance of power in President elect Joe Biden's favor. Despite earlier worries about the economic risks of a"blue sweep", expectations for a large fiscal stimulus package in early 2021 are now pushing markets higher.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo said."The market is optimistic that Biden's victory will not be overturned," he said, noting that investors are positioning for a U.S. economic recovery. "Even though we are bearing witness to the markets' keen knack of ironing itself out quickly, the most important question now is the sequencing of the Biden policy plan," Axi Chief Global Market Strategist Stephen Innes wrote in a note."While Biden could theoretically get the ball rolling and undo many of the Trump tax cuts for corporations and wealthy individuals on Day One, I cannot imagine that tax hikes are the priority number one when the current mandate is to rid the U.