Asian Stock Markets Rise as US Elects Obama

By JEREMIAH MARQUEZ / AP WRITER

HONG KONG — Asian stock markets rose Wednesday, tracking solid overnight gains on Wall Street, as uncertainty about the next leader of the world's largest economy was lifted with Democrat Barack Obama's elevation to the US presidency.

Many investors were hopeful that the president would focus renewed energy on tackling deteriorating economic conditions in America—a vital export market for Asian goods—that have dragged on growth around the world.

Analysts said the markets' gains weren't necessarily driven by a preference for Obama over Republican rival John McCain. It was more relief that came with the end of the long US presidential campaign, coupled with rising confidence that as the credit crunch eases world equities markets could see a year-end rally after October's brutal sell-off.

Obama's win "is an excuse for the market to rally. There's less political uncertainty and that gives investors more confidence in the short term," said Frank Gong, a Hong Kong-based managing director for JP Morgan Securities. "But technically it's more about the credit crisis settling down and the market's fear coming down."

Some analysts said the next administration would be hard pressed to deliver a quick fix to the many US economic woes.

"Changing the president is not going to be enough to save the American economy," said Kazuo Mizuno, chief economist at Mitsubishi UFJ Securities Co in Tokyo.

He said the US is likely to need financing from Japan, China, the Middle East and other countries if it hopes to fund public bailouts for its financial system and deliver on tax breaks and other measures needed for recovery.

"Even the president is not going to be able to change America without help from the world," Mizuno said.

With Asian countries heavily reliant on exports for growth, there's also the potential for trade friction should the Democratic party, in charge of the White House and Congress, back protectionist policies, analysts said.

"Obama has at times sounded protectionist, and time will tell whether this will meaningfully impact the further development of trade links around the world," Moody's economist Sherman Chan in Sydney wrote in a research note.

Most stock markets across Asia rose. Japan's Nikkei 225 stock average advanced 4.5 percent to 9,521.24, and Hong Kong's Hang Seng Index added 3.7 percent to 14,912.66.

Australia's main stock index rose 2.9 percent, South Korea's Kospi rose 2.4 percent and Singapore's key stock measure added 3.5 percent. India's market fell 1 percent.

The upswing followed Wall Street, where many investors looked past more signs of a slumping US economy and piled into stocks.

The Dow Jones index staged its biggest Election Day rally ever, rising 305.45 points, or 3.3 percent, to close at 9,625.28. The broader indices also rose, with the Standard & Poor's 500 index up 39.45, or 4.1 percent, to 1,005.75, its first close over the 1,000 mark since October 13.

Wall Street futures were down, suggesting a lower open in the US Wednesday. Dow futures were down 79, or 0.8 percent, at 9,508, while S&P futures were down 9.9, or 1 percent, at 993.50.

In Japan, a weaker yen boosted shares of major exporters including automakers and consumer electronics firms. Toyota Motor Corp. rose 8.1 percent, Canon Inc. jumped 11.7 percent and Sony Corp. advanced 6.3 percent.

The dollar was trading at 99.58 yen, up from the 98-yen zone the previous day in Asia.

Oil prices retreated after surging above $70 a barrel overnight. Light, sweet crude for December delivery was changing hands at $68.28, down $2.25 in Asian trade on the New York Mercantile Exchange.