October 06, 2020: Asian equities rallied again Tuesday as investors picked up the baton from their US counterparts, with demand for higher-risk assets boosted by hopes for a new US stimulus and growing expectations Joe Biden is on course to become the next president.

                  News that Donald Trump had returned to the White House after hospital treatment for coronavirus also lifted a major source of uncertainty over the November 3 polls, which some had feared could have been delayed.

                  All three main indexes rallied Monday — with the Nasdaq racing more than two percent higher — after Friday's losses, as the president's condition improved, while analysts pointed out that his positive test for Covid-19 could be the jolt US lawmakers needed to finally agree with a new rescue package.

                  Talks were revived last week with a series of phone calls and an in-person meeting between Treasury Secretary Steven Mnuchin and Democrat House Leader Nancy Pelosi.

                  The speaker's deputy chief of staff Drew Hammill said the two planned to hold another call Tuesday.

                  “Investors are likely running with the idea that recent data and President Trump's first-hand experience with the virus increases the odds of another fiscal package,” Adam Phillips, at EP Wealth Advisors, said.

                  “It is becoming harder to deny the need for additional fiscal support.”

                  Hong Kong climbed one percent in morning trade, having put on around two percent in the previous two trading days, while Tokyo went into the break 0.5 percent higher. Seoul, Singapore and Wellington were also up while Taipei and Jakarta both jumped more than one percent. Sydney was flat and Shanghai closed for a holiday.

                  Investors are increasingly confident Biden will beat Trump, with recent polls putting him between 10 and 14 points ahead nationally and leading in crucial swing states. Analysts pointed out that polls also suggest voters think Trump could have handled the pandemic better.

                  A big win for the former vice president would lower the chances of Trump challenging the result, removing more uncertainty from markets.

                  Traders are also eyeing a Democrat sweep of both houses of Congress, which could mean their previously proposed stimulus of more than $3 trillion could be dusted off and pushed through.

                  “The market seems to have settled on the idea that a Biden win is bullish stocks… as the return of stability and the promise of (big government) spending outweigh any concerns about future tax hikes” that would be expected from the Democrats, said Axi strategist Stephen Innes.

                  – Key figures around 0230 GMT –

                  Tokyo – Nikkei 225: UP 0.5 percent at 23,425.91 (break)

                  Hong Kong – Hang Seng: UP 1.0 percent at 23,994.20

                  Shanghai – Composite: Closed for a holiday

                  Euro/dollar: UP at $1.1790 from $1.1781 at 2100 GMT

                  Dollar/yen: DOWN at 105.68 yen from 105.72 yen

                  Pound/dollar: UP at $1.2985 from $1.2979

                  Euro/pound: UP at 90.80 pence from 90.77 pence

                  West Texas Intermediate: DOWN 0.1 percent at $39.20 per barrel

                  Brent North Sea crude: UP 0.1 percent at $41.35 per barrel

                  New York – Dow Jones: UP 1.7 percent at 28,148.64 (close)

                  London – FTSE 100: UP 0.7 percent at 5,942.94 (close)

AFP/APP

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