By Canadian Press

World stocks settle after US election-inspired rally

Nov 8, 2018 | 5:50 AM

SINGAPORE — World stock markets stabilized Thursday after rallying on the result of the U.S. midterm elections, which quelled fears of a drastic shift in policies.

KEEPING SCORE: In Europe, Germany’s DAX fell back 0.2 per cent to 11,558 and the CAC 40 in France slipped 0.1 per cent to 5,135. Britain’s FTSE 100 gained 0.4 per cent to 7,141. Wall Street was set to open lower after rebounding in the previous session. Futures for the S&P 500 index fell 0.4 per cent and Dow futures lost 0.2 per cent.

ASIA’S DAY: Japan’s benchmark Nikkei 225 rallied 1.8 per cent to 22,486.92, even as machinery orders slid a record 18.3 per cent in September from the previous month because of natural disasters. South Korea’s Kospi rose 0.7 per cent to 2,092.63. Hong Kong’s Hang Seng added 0.3 per cent to 26,227.72, while the Shanghai Composite fell 0.2 per cent to 2,635.63. Australia’s S&P/ASX 200 gained 0.5 per cent to 5,928.20. Shares were higher in Taiwan and throughout Southeast Asia.

U.S. MIDTERMS: In line with most polls, the Democrats took control of the House of Representatives while the Republicans held on to a majority in the Senate. A larger Democratic presence could act as a check on President Donald Trump, but it is unlikely to change his position on big agenda items. This sat well with investors, as politics is that much less likely to crowd out the performance of the strong U.S. economy. A Federal Reserve meeting ending Thursday is not expected to result in an interest rate hike.

ANALYST’S TAKE: “While it is tempting to extrapolate the risk rally through to the end of the year, it must be noted that a split Congress should have no bearing on how Trump intends to handle the U.S.-China trade war,” DBS Group Research said in a commentary. “On this front, market participants are hoping that Trump will be able to cut a deal with Xi, with further meetings planned for the G-20 summit at the end of the month,” it added.

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ECONOMIC DATA: Data from China showed exports grew in October despite higher tariffs on its goods by the U.S. Total exports saw a 15.6 per cent year-on-year increase, as compared to 14.5 per cent in September. Imports also accelerated 21.4 per cent from a year earlier, as compared to 14.3 per cent the previous month.

Meanwhile, the European Union’s executive Commission said eurozone growth this year is expected to moderate to 2.1 per cent from last year’s decade-high rate of 2.4 per cent. They noted trade tensions are weighing on exports and that growth is likely to increasingly come from domestic factors like consumer spending.

ENERGY: Benchmark U.S. crude oil gained 4 cents to $61.71 in electronic trading on the New York Mercantile Exchange. It fell 54 cents to $61.67 a barrel in New York. Brent crude shed 9 cents to $71.98. The contract dropped 6 cents to close at $72.07 in London.

CURRENCIES: The dollar rose to 113.64 yen from 113.57 yen late Wednesday. The euro was flat at $1.1426.

Annabelle Liang, The Associated Press