* Commodities, Financials, and Chipmakers Lead Large Equity Gains
* U.S. Futures Higher As Investors Look Beyond Capitol Protests
* Tencent and Alibaba slip on possible threat of US sanctions
SINGAPORE, Jan. 7 (Reuters) – Bonds groomed losses as stocks and commodities gained Thursday in anticipation of a big borrowing and big spending by the Democratic administration boosting growth, after the second round of elections that gave the party control of the US Congress.
U.S. Treasuries had suffered their biggest selloff in months after Democratic victories in two races in Georgia gave them tight Senate control, bolstering President-elect Joe Biden’s power to push through his platform.
Risk sentiment was temporarily dampened by images of supporters of President Donald Trump storming Capitol Hill, but S&P 500 futures rose 0.6% and Nasdaq 100 futures rose 0.6%. increased by 0.8% during the session in Asia, as order was restored. FTSE futures rose 0.4% and EuroSTOXX 50 futures rose 0.2%.
Across Asia, large economically exposed stocks led the gains. Chipmakers Samsung and SK Hynix have driven the South Korean Kospi to an all time high. The Rio Tinto and BHP miners have reached unprecedented heights.
The broadest MSCI index of Asia-Pacific stocks outside of Japan rose 0.7% and Japan’s Nikkei rose 2% to its highest level since 1990.
“It’s basically a mirror exchange,” said Mathan Somasundaram, director of Sydney-based research firm Deep Data Analytics, who added that the Democrats’ sweep was unexpected by most investors and “changes a lot.”
“Even though it’s a very slim margin, it gives Democrats a two-year window (to continue their agenda),” he said. “Anything that benefits from the price hike will work fine … when you look at the political parameters they’re trying to stick to, it’s about printing (money for) Main Street and not Wall Street.”
Wednesday’s bond sell-off pushed the benchmark 10-year U.S. Treasury yield above 1% for the first time since March. It climbed to 1.0510% on Thursday.
The US dollar wallowed as the result became clearer, as currency traders believe that large and growing US trade and budget deficits will weigh on the greenback.
The dollar hit an almost three-year low against the euro of $ 1.2349 and hovered near that level on Thursday. It also languished near recent multi-year lows against the Aussie, the Kiwi and the Swiss Franc.
CAPITOL CHAOS, CHINA CRACKDOWN
The exuberance has been tempered by some sales of tech stocks, as investors expect the industry to face taxes and regulations, and disturbing scenes of protesters storming the Capitol to disrupt the certification of the electoral defeat of Donald Trump.
Wall Street emerged from session summits as police evacuated lawmakers and struggled for more than three hours to clear Capitol of Trump supporters.
“What gives us a bit of a break is that the economy is still very fragile and I think Democrats are unlikely to have such an easy time as the markets are trying to predict by adopting some of these policies. “said Tim Chubb, director of investments at wealth advisor Girard in Pennsylvania.
Congress has since reconvened to resume electoral certification, where it quickly became clear that objections by pro-Trump Republican lawmakers to Biden’s victory in the battlefield states would be overwhelmingly dismissed.
Meanwhile, the US crackdown on Chinese companies appears to be worsening, sources telling Reuters that the Trump administration is considering extending investment bans to tech giants Alibaba and Tencent.
Shares of both companies fell more than 4% in Hong Kong, and shares of three Chinese telecommunications companies that the New York Stock Exchange finally decided to remove after a week of about-face also fell sharply.
Oil prices hovered near a 10-month high, basking in the wake of a production cut promised by Saudi Arabia. Brent futures rose 0.7% to $ 54.69 per barrel and US crude futures rose 0.9% to $ 51.07 per barrel.
Gold was stable at $ 1,920 an ounce and the company Bitcoin after hitting a new high of $ 37,800.
Report by Tom Westbrook in Singapore. Additional reporting by Joori Roh in Seoul and Imani Moise in New York; Edited by Sam Holmes, Jane Wardell and Lincoln Feast.