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Asian Stocks Struggle Amid Rising US Election Risks as Yen Strengthens

Asian stocks fluctuate due to US election risks, while the yen gains strength. Explore the latest trends affecting Asian stocks, including China's economy, the US presidential race, and investor sentiment.

Asian Stocks Fluctuate on US Election Risks

DUBAI (Reuters) — Asian stocks fluctuated on October 24, 2024, as investor concerns about the US presidential election and China's economic outlook created uncertainty in the markets. The Japanese yen rose, halting a three-day decline as sentiment shifted among traders.

Concerns About China's Economy Impact Asian Stocks

Shares in China, Hong Kong, and South Korea fell, while US stock futures advanced. Japan’s Finance Minister Katsunobu Kato expressed concerns over "one-sided, rapid moves" in the currency market after the yen dropped over 1% against the dollar on Wednesday. Meanwhile, benchmark 10-year US yields decreased by two basis points, partly reversing a previous session's increase.

Oil prices rebounded after a dip as traders reassessed tensions in the Middle East and the outlook for market balances heading into 2025.

US Presidential Race Influences Asian Stocks

The US presidential race between Donald Trump and Kamala Harris is statistically tight, with candidates nearly even among likely voters in swing states, according to a Bloomberg News/Morning Consult poll. “Asian markets are generally mixed in today’s session, with some anxiety as we inch closer to the upcoming US elections,” noted Jun Rong Yeap, market strategist at IG Asia Pte.

Impacts of Federal Reserve Policies on Asian Stocks

Regional equities have lost momentum after a 5% rally in September as traders weigh risks, including concerns about whether China’s recent stimulus measures are sufficient to boost growth. The pace of Federal Reserve easing remains a key concern, with traders uncertain about rate cuts in upcoming policy meetings.

“There is still doubt whether the stimulus will fundamentally change the situation,” Vanessa Xu, chief investment officer at VS Partners, told Bloomberg TV. Recent price volatility in Chinese stocks reflects a tug of war between speculative and serious long-term investors.

Notable Developments in Technology and Commodities

In tech news, Taiwan Semiconductor Manufacturing Co. halted shipments to a client after discovering that chips intended for that client ended up with Huawei Technology Co., potentially violating US sanctions. In South Korea, shares of SK Hynix Inc. gained following a record quarterly profit announcement.

In Hong Kong, Horizon Robotics Inc. saw its shares surge nearly 38% in its trading debut, adding to optimism over a revival in initial public offerings in the Asian financial hub.

Conclusion: Market Outlook Amidst Election Uncertainty for Asian Stocks

The pullback in US and Asia-based tech and AI companies presents an attractive entry point for investors, according to Julia Wang, global market strategist at JPMorgan Private Bank. Despite the clouded investor appetite caused by Treasury yield movements and the strong dollar, Wang views this as a "buy-the-dip opportunity."

In commodities, gold edged higher after its largest fall in 11 weeks due to higher US bond yields and profit-taking near record highs.

Key Market Moves:

Stocks:

• S&P 500 futures rose 0.2% as of 12:15 p.m. Tokyo time.

• Nasdaq 100 futures increased by 0.5%.

• Japan’s Topix fell 0.2%.

• Australia’s S&P/ASX 200 rose 0.3%.

• Hong Kong’s Hang Seng declined by 0.6%.

• The Shanghai Composite dropped 0.6%.

Currencies:

• The Bloomberg Dollar Spot Index was steady.

• The euro remained unchanged at $1.0788.

• The Japanese yen gained 0.2% to 152.40 per dollar.

• The offshore yuan rose 0.2% to 7.1247 per dollar.

Cryptocurrencies:

• Bitcoin rose 1.1% to $67,291.07.

• Ether increased by 1.5% to $2,551.12.

Bonds:

• The yield on 10-year Treasuries fell to 4.22%.

• Australia’s 10-year yield remained stable at 4.46%.

Commodities:

• West Texas Intermediate crude rose 1.4% to $71.78 a barrel.

• Spot gold increased 0.3% to $2,723.75 an ounce.