Stock markets mostly climb before US vote
World stock markets mainly rose yesterday on a wave of investor optimism a day before US presidential elections and ahead of crucial interest rate decisions in Europe due this week, dealers said.
European and Asian equities chalked up big gains, making a positive start to November after a bleak October that was marred by the spreading worldwide financial crisis.
"There is a growing optimism that we could be in for a very good week indeed," said Joshua Raymond, market strategist at City Index in London.
"Optimism is being fuelled by the impending rate cuts, a US election that has cemented a call for change, and the beginnings of a short term upwards trend in the markets after five days of straight gains."
Markets were eagerly awaiting Tuesday's US presidential elections, with polls giving Democrat Barack Obama a sharp edge over Republican John McCain on the last day of campaigning.
"In the context of the current financial climate, it is possible that an Obama victory could well provide the necessary spark for optimism to return to the markets," Raymond said.
He added: "The US election has historically sparked a surge in the markets and given the circumstances of an impending Obama victory, you wouldn't bet against history.
"However, considering the strength of Obama's surge into an apparent first place, a McCain victory would make the markets much harder to call."
In Asian stock market action on Monday, Hong Kong closed up 2.7 percent, Sydney added 5.06 percent, Singapore jumped 5.0 percent and Taipei gained 2.55 percent in value. Tokyo was shut for a public holiday.
In Europe nearing the half-way point, Frankfurt rallied 0.57 percent, London climbed 0.42 percent, while Paris nudged 0.02 percent lower.
"With financial markets staying relatively stable, the focus this week will be on the raft of rate decisions and economic data scheduled for release," noted Barclays Capital analyst David Woo.
Interest rate decisions were due on Thursday from the Bank of England and the European Central Bank.
Both are widely expected to slash borrowing costs because inflation is falling fast and the threat of recession is looming large, analysts said.
Central banks in Tokyo and Washington cut their main lending rates last week to 0.3 percent and a record low of 1.0 percent, respectively.
In Mumbai on Monday, Indian shares soared 5.62 percent after the country's central bank unexpectedly cut its key lending rate by 50 basis points over the weekend, dealers said.
Investor sentiment was buoyed Monday after Wall Street jumped higher before the weekend.
Asian shares rose on Monday on hopes of fresh stability in the markets but fears of recession lingered, with South Korea unveiling a stimulus package to cushion the blow of the financial crisis.