Asian Stocks Down as Vote Counting Starts for Georgia Election

Asian Stocks Down as Vote Counting Starts for Georgia Election

© Reuters.  © Reuters.

By Gina Lee – Asia Pacific stocks were mostly down on Wednesday morning, with vote counting for a U.S. Senate runoff election in the state of Georgia currently underway.

China’s Shanghai Composite was down 0.33% by 9:58 PM ET (2:58 AM GMT) while the Shenzhen Component inched up 0.05%. The for December, released earlier in the day, read 56.3, above the 50-mark indicating expansion but lower than November’s 57.8 figure.

The data follows Monday’s Caixin Manufacturing PMI, which read 53 for December, as well as the release of the manufacturing PMI and the non-manufacturing PMI during the previous week.

Tensions between the U.S. and China are up, with U.S. President Donald Trump also signed an order banning U.S. transactions with eight digital Chinese payment platforms, including Ant Group’s Alipay.

Investors are also focused on whether the New York Stock exchange will delist China Mobile Ltd (HK:0941), China Telecom Corp Ltd (NYSE:CHA) and China Unicom Hong Kong Ltd (NYSE:CHU) on security grounds. Although the bourse reversed its decision to delist the trio on Tuesday, it could reportedly restart delisting plans.

Hong Kong’s Hang Seng Index fell 0.50%. Over 50 activists and politicians were taken into custody earlier in the day on suspicion of violating the city’s national security law. The group included former opposition politicians Alvin Yeung, James To, Andrew Wan and Lam Cheuk-ting, as well as academic and activist Benny Tai.

The charges stem from an informal primary in July 2020 to choose candidates for the legislative election due to have taken place in September and which was subsequently postponed.

Japan’s Nikkei 225 was down 0.38% and South Korea’s KOSPI inched down 0.08%. In Australia, the ASX 200 slid 1.09%.

In the Georgia election, the two Democrat candidates, Jon Ossoff and Raphael Warnock currently have leads in early returns.

The COVID-19 pandemic is taking a short-term backseat as investors await the election results, due later in the day. A win for the Democrat pair would mean that President-elect Joe Biden can push his agenda, which includes more stimulus and tax hikes, more easily through a Democrat-controlled Congress. However, a win for the two incumbent Republican candidates would mean a much more difficult path for Biden’s agenda.

“Democrats would need to win both races to control the Senate and hence both houses, allowing them far more freedom to run larger fiscal packages,” Nordea Investment senior market strategist Sebastien Galy said in a note.

“A dual win should lead to a steeper curve and a weaker dollar as the fiscal situation would be seen as unsustainable, but it would also be welcomed by the equity market, particularly cyclicals, while in growth pressure might appear on the monopolistic Internet giants.,” the note added.

Congress will also meet to count the electoral votes from the Nov. 3 presidential election and certify Biden’s victory later in the day. The Federal Reserve will also release the minutes from its December policy meeting.

Original Article

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