Asian markets struck by initial US uncertainty

UNCERTAINTY over the outcome of the presidential election weighed on Asian markets as they opened this morning, after the Dow Jones index had posted its biggest gain in a month as the US voted.

Wall Street had bet on a Barack Obama victory yesterday, pushing the Dow up more than one per cent yesterday.

Japan’s Nikkei index followed it early this morning, opening up 0.6 per cent. However, as early voting results created more uncertainty than clarity, the index slumped to below yesterday’s closing price.

While Romney’s policies are generally perceived as being pro-business, an Obama victory would be seen as more friendly to bonds, due to his preference for lower interest rates.

The price of gold rose for a second successive day, as investors suggested further stimulus measures from the Federal Reserve would be more likely under Obama than under his Republican opponent Mitt Romney.

The President has promised to keep Reserve chairman Ben Bernanke, while Romney prefers a tighter fiscal policy, and may replace Bernanke.

The dollar also reached an eight-week high against the euro.

The clear message from the market however, was that it wanted a clear winner emerging by this morning. With pollsters predicting that the slight gap between Obama and his challenger Mitt Romney had widened, US equity markets rose in relief that uncertainty was unlikely to drag on.

Analysts suggested that an Obama victory was priced into the market, with volatility expected in the event of a Romney victory.

Dow Jones closed up 1.3% its biggest gain in two months

Dollar hits 8week high against the euro