In the consequential US Presidential election, as early tally suggests that the result will be closer than what polls estimated, there is being witnessed bouts of volatility across financial markets. And different asset classes are performing differently ahead of the US election outcome which may get prolonged now.
As hopes of an early and decisive US Presidential election outcome faded, early Wednesday as of 3:38 am ET the US stock futures were dragged lower. While Dow Futures were down 0.15% or 40 points, NASDAQ and S&P futures were up 2.43% or 274 points and 0.57% or 19 points, respectively. At one point NASDAQ futures jumped to over 3% after Joe Bidenand Donald Trump got locked in a tight race to US Presidential position.
Indian indices were also volatile and towards the end of the trading session were near day's high, with Sensex at 40607, while Nifty also up 0.8 percent to 11900 points.
Gold prices headed southwards on weak global cues and gains in the dollar index against a basket of six currencies. Dollar index has been gaining ground amid uncertainty over US election outcome and last at 4:07 am EST quoted higher by 0.35% at 93.88.
In the international markets, gold slipped by over 1 percent after early result tally pointed to a close contested election between Donald Trump and Democratic candidate Joe Biden. Spot gold fell 0.8 per cent to $1,893.93 per ounce by 0254 GMT. US gold futures fell 0.9 per cent to $1,894.20.
On the MCX, gold futures for December delivery traded lower by over 0.7% or Rs. 371 at Rs. 51227.
As President Trump won in some key US states, chance of Joe Biden's clean victory in the US election has come down. Biden if elected to US Presidency is expected to announce a larger bail-out package to help revive the Covid 19 battered US economy.
Oil has been on a losing streak owing to ravaging coronavirus situation across the globe amid concerns that fuel demand shall remain subdued. Nonetheless, after advancing as much as 3.4%, oil pared gains and was up 1.9 percent. West Texas Intermediate for December delivery were up 1.9% at $38.37 a barrel on the New York Mercantile Exchange as of 10:13 a.m. in Singapore.
As market participants react to early clues on possible Trump or Joe Biden victory, there is expected to be heightened volatility over the next few hours and hence financial assets too will witness a choppy trade.