China and Other Asian Markets Rally After Biden Win

China and Other Asian Markets Rally After Biden Win

Democrat Joe Biden’s win in the U.S. presidential elections has caused a rally on Asian stock markets.

Even before the weekend, the expectation that the former vice president would prevail caused major stock indices on the continent to rise.

The Kospi ended Monday 12.5 per cent above January levels, while the embattled Hang Seng caught up to 9 per cent below early 2020 levels.

The expectation of a trade-friendly Biden administration and an end to China tariffs not only caused Asian stock markets to start a rally but increasing demand for local currencies deemed to gain importance again in a post-Trump world economy.

Despite coronavirus outbreaks returning in some parts of Asia throughout the year, local stock markets continued to gain from May on. The development mirrored the situation in the U.S. where infections continued to spread after a short slowdown, but stock markets did not react to the virus reprise in the same way they did when the virus emerged in early 2020.

Hong Kong, which battled a spike in cases in July and also is embroiled in a fight for its independence with China, saw markets recover the least as a result. In China, where case numbers have remained mostly stable, markets have been back above January levels since early July. In August, the first batch of companies debuted on Shenzhen’s overhauled Nasdaq-style ChiNext index and was overrun by investors. The development again was reminiscent of tech stock gains in the U.S., which seem to have detached themselves from the coronavirus drama.

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