Nov 07, 2018 (China Knowledge) - China and Hong Kong markets remain tentative in Wednesday trading as traders and investors try to make sense of the consequences of the U.S. election where Democrats won the House and Republicans managed to retain the Senate.
The China and Hong Kong stock exchanges remained largely unchanged throughout the entire trading day. However, more reactions may be seen on Thursday as investors in China and Hong Kong tend to follow after the U.S. markets.
Stock indexes in China and Hong Kong have been hit hard throughout the year with the on-going trade war, between China and U.S., weighing heavily on investor sentiments.
Moving forward, a divided U.S. congress may dilute the Trump administration’s power as the Democrats are expected to challenge Trump’s policies more actively. Previously, even some Republicans who had their doubts about Trump’s trade policies were reluctant to voice out their opinions due to Trump’s widespread popularity among the Republican voters.
While a major rebound will not take place overnight, the election results may boost market sentiments and give investors more confidence to participate in risk assets.
The Dow Jones, Nasdaq and S&P 500 futures have all gone up after the announcement of the election results.
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