Asian stocks edge down as investors await US election results

Equities traded lower and currency markets were steady on Wednesday in Asia as investors monitored US election results for any signs of a major upset.

Bitcoin fell 3 per cent to $18,139 in a broad sell-off of crypto assets after the near collapse of Sam Bankman-Fried’s FTX, one of the world’s largest crypto exchanges, due to a liquidity crunch. Bitcoin had fallen as much as 17 per cent on Tuesday while smaller coins faced steeper falls.

In China, the CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.75 per cent, while Japan’s Topix shed 0.4 per cent and Hong Kong’s Hang Seng fell 1.5 per cent.

The minor moves of Asian stocks came as polls in many US states closed and results began to filter in for midterm elections across the country.

Among the earliest results, Republican gubernatorial candidates notched victories in Florida and Arkansas, while governorships in Maryland and Massachusetts flipped to Democratic control.

Analysts said markets had already priced in Republican majorities in both the US House and Senate.

“Prediction markets — and probably financial markets — expect a Republican majority in both chambers,” said Jan Hatzius, chief economist at Goldman Sachs.

“The financial market reaction to a Republican win should be muted, as the House outcome is already widely expected,” Hatzius said, adding that a Democratic victory in both the House and Senate “would likely weigh on equities, as market participants might expect additional corporate tax increases.”

Futures markets tipped the benchmark S&P 500 index to open flat later in the day, while the FTSE 100 was expected to shed 0.3 per cent.

Over the last 18 midterm election cycles, the S&P 500 has advanced by an average of about 5 per cent in the year leading up to election day, but more than 15 per cent in the 12 months after, according to analysts at Oxford Economics.

In currency markets, the dollar index tracking the greenback against a basket of international peers ticked up 0.2 per cent, while the euro edged down 0.1 per cent to $1.0064.

Additional reporting by Jaren Kerr in New York