Markets in Asia took their cue from Wall Street, where stocks rose sharply on Wednesday. The Dow closed up 368 points, or 1.3%, higher. At its highest level, the index was up more than 800 points in Wednesday’s session. The S&P ended 2.2% higher. The Nasdaq added 3.9%.
The Bank of England held interest rates at 0.1% but added £150 billion ($195 billion) to its bond buying program as the country continues to grapple with fallout from the coronavirus pandemic. England has re-entered a national lockdown to counter a surge in Covid-19 cases and deaths.
The Federal Reserve will also make a policy announcement Thursday as coronavirus cases in the United States spike. There were more than 100,000 new infections on Wednesday for the first time since the pandemic began.
“There will be more easing at some point, but perhaps not as soon as today,” Societe Generale strategist Kit Juckes said in a note to clients.
Even though a delayed and contested election result was heralded as the market’s “nightmare scenario,” stocks rallied all day on Wednesday. Experts believe a delay was already priced in by investors and say that the possibility that a Republican Senate would restrain a Democratic White House is giving stocks a boost.
If Republicans hold the Senate, they will want to stop what they see as the Joe Biden “spending agenda” and “runaway federal debt,” which will mean less fiscal stimulus and no corporate tax increases, said Jon Lieber, managing director with consultancy Eurasia Group.
The Republicans are fundamentally a “small government, low tax party” that doesn’t want to see spending rates growing so much, Lieber said during a Wednesday seminar held by Eurasia Group.
Juckes said a divided Congress would only increase the influence of Fed Chair Jerome Powell, who has been “the markets’ best friend” this year.
— CNN’s Julia Horowitz, Jill Disis and Anneken Tappe contributed to this report.