Asian stock markets reversed early losses to move higher today after President Barack Obama won a fiercely contested race for re-election.
Stock markets had been in a state of suspended animation throughout the week as investors waited for the cliffhanger election to end. Now, with the Republican challenger Mitt Romney defeated, politicians in the world’s biggest economy can refocus on issues other than the campaign.
One of the most pressing issues facing the U.S. is the looming “fiscal cliff,” a combination of higher taxes and government spending cuts that automatically takes effect unless Congress acts by Jan. 1.
Economists have warned that if this so-called fiscal cliff is not avoided, the adverse effects could push the U.S. economy back into recession. Deciding the election is the first step toward a resolution.
Japan’s Nikkei 225 index, bobbling between gains and losses, rose less than 0.1 percent to 8,976.40. Hong Kong’s Hang Seng added 0.3 percent to 22,010.27. South Korea’s Kospi gained 0.2 percent to 1,933.52. Australia’s S&P/ASX 200 rose 0.7 percent to 4,516.50. Benchmarks in New Zealand, Indonesia, Singapore, mainland China and Taiwan also rose. Stocks in the Philippines fell.
The race’s results assured not only Obama of a job for the next four years. Federal Reserve chairman Ben Bernanke appears set to hold onto his job for another term. Romney, who disapproved of Bernanke’s bond-buying programs to stimulate the U.S. economy, had said he would not reappoint him to another term to lead the Fed.
Congratulations to President Obama!