Global financial markets were waiting cautiously on Tuesday for the outcome of the US presidential election.
Hopes that the Democrat candidate Hillary Clinton would defeat her Republican rival Donald Trump helped to spur a rally in stocks around the world on Monday and to drive up the dollar.
But by Tuesday a more cautious mood with stocks across Asia and Europe treading water as polling stations opened across the US after one of the most fraught election campaigns in the country’s history.
European shares drifted lower in morning trading after the Tokyo stock market closed down.
The eurozone’s blue-chip Euro Stoxx 50 index had slipped 0.1 per cent to 3007 points by lunchtime after closing up 1.85 per cent on Monday.
The dollar was unchanged at 1.1040 dollars against the euro after chalking up modest gains following the FBI’s decision not to proceed with a further probe into the Clinton email scandal, which has dogged her bid for the White House.
Historically, financial markets have tended to back the normally pro-business Republicans in elections in the world’s biggest economy.
But analysts say the uncertainty unleashed by Trump’s nationalistic populism and the protectionist tone to his campaign – including vows to roll back trade agreements – have swung financial markets behind Clinton’s candidacy.
"An air of caution remains in the market going into the US presidential election," Shingo Ide, chief equity strategist at the NLI Research Institute, told Kyodo News agency.
While many in the market think Clinton can defeat Trump, Ide said that investors will remain unsettled until the outcome becomes clear.
Japanese shares were mixed as investors sold shares to lock in quick profits after recent gains, while some export-linked issues were lifted by a weaker yen.
The benchmark Nikkei 225 Stock Average edged down 5.83 points, or 0.03 per cent, to close at 17,171.38 after gaining 1.6 per cent on Monday.
The broader Topix index was up 0.69 points, or 0.05 per cent, at 1,363.49.
Stocks in China and Hong Kong posted modest gains Tuesday. Hong Kong’s Hang Seng index rose 0.47 per cent, at 22,909.47, while the Shanghai Composite Index also added 0.46 per cent, at 3,147.89.
US stocks surged overnight after the FBI’s announcement appeared to give a boost to Clinton’s campaign for the presidency.
The benchmark Dow Jones Industrial Average finished about 2.1 per cent higher, while the broader Standard & Poor’s 500 Index closed with a gain of 2.2 per cent. (DPA)
