INSUBCONTINENT EXCLUSIVE:
TOKYO: Wall Street stock futures and Asian shares erased losses to eke out small gains on Wednesday as early results of US mid-term
elections appeared to show Republicans improving their chances of retaining their grip on Congress.
US SP500 futures were up 0.4 per cent,
clawing back earlier losses of 0.4 per cent, and the dollar pared its decline, as Republicans were on track to pick up a few
closely-contested seats on the East Coast.
The congressional elections is billed as a referendum on President Donald Trump's polarising
style and "America First" policies.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 per cent while Japan's Nikkei rose
0.6 per cent.
"It seems like the Republicans have the real chance of taking not only the Senate but also the House
That appears to be boosting stocks," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
Investors had expected the
opposition Democrats to pick up at least 23 seats they need to gain a majority in the House and, as a result, remained sceptical about
Trump's proposal late last month on tax cuts for middle-income households.
While the final results are still hours away, markets have
reacted as a surprise victory by the Republicans could boost the chances of further tax cuts and pro-business policies.
On the other hand,
many investors also expect Trump to continue to take a hard line on tariffs, which he can impose without Congressional approval
That keeps alive worries about a trade war between China and the United States.
Trump's massive tax cut, enacted in December, and a spending
agreement reached in February have helped lift the US economy, but they have also widened US federal budget deficit.
As a result, Treasury
supply has been growing, pushing US bond yields higher.
The 10-year US Treasuries yield rose to at 3.224 per cent , near its seven-year high
of 3.261 per cent touched a month ago, as investors sold ahead of this week's record amounts of longer-dated government debt supply.
Oil
prices were soft after a 2 per cent fall the previous day, with US crude futures hitting an eight-month low as Washington granted sanction
waivers to top buyers of Iranian oil and as Iran said it has so far been able to sell as much oil as it needs to.
US West Texas Intermediate
(WTI) crude futures traded down 0.7 per cent at $61.78 a barrel having hit a low of $61.31 on Tuesday, the weakest price since March 16.
The
dollar index recovered from early losses to trade almost flat.
The euro stood flat at $1.1427, retreating from a rise to two-week high of
$1.1473.
The yen stood steady at 113.45 per dollar while the British pound changed hands at $1.3100, flat on the day.
Earlier the sterling
hit a three-week high, extending gains on hopes of a Brexit deal breakthrough after Brexit Secretary Dominic Raab said "Thumbs Up" on his
way out of a cabinet meeting.
That helped sterling recover losses following remarks from a senior member of the Northern Irish Democratic
Unionist Party earlier that it looked like Britain would exit the EU without a deal.
