Asian Stocks Rise After Presidential Debate as Thai Shares Slump

  • Friday’s U.S. jobs report signals Fed rate rise in December
  • Markets in Hong Kong, Japan and Taiwan shut for holidays

Asian stocks rose following the second U.S. presidential debate between Hillary Clinton and Donald Trump, while Thai shares tumbled after the royal palace said the king’s condition was unstable.

The MSCI Asia Pacific excluding Japan Index added 0.1 percent as of 4 p.m. in Hong Kong. Chinese stocks rose as the nation’s markets reopened after a weeklong break. Thai shares headed for the steepest drop in more than a year, while Philippines equities fell for a fourth day. Republican nominee Trump’s reputation took a blow after a 2005 video surfaced of him talking in vulgar and degrading terms about women. An American jobs report on Friday showed its central bank remains on course to lift interest rates in December.

“The market’s judgment is that this debate could have been worse for Trump: he didn’t implode," said Ric Spooner, Sydney-based chief market analyst at CMC Markets Asia Pacific Ltd. Still, “it looks like a clear Clinton victory at the election at this stage," he said.

Americans are due to go to the polls to elect their next president on Nov. 8. The stakes couldn’t be higher for Trump or the Republican party after the release of the video, which triggered a rush of Republican officeholders to distance themselves from him or call for his exit from the race for the White House.

During the debate, Trump dismissed his obscene and vulgar comments in the video as nothing more than “locker-room talk” and tried to deflect from the issue by attacking Clinton over her e-mail use and past accusations of sexual misconduct by her husband, former president Bill Clinton.

“This is dangerously close to the election, so it’s harder for him to recover,” Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which oversees about $121 billion, said before the debate.

Traders signaled a slightly higher chance of the Fed raising its key interest rate by the end of this year after Friday’s jobs report. Futures on Friday indicated a 64 percent chance the central bank will tighten policy by its December meeting, with the calculation based on the assumption the effective fed funds rate will trade at the middle of the new range after the central bank’s next increase.

Payroll gains in the U.S. economy slowed for a third month, while August hiring was stronger than initially estimated, Labor Department data showed Friday. 

“The jobs numbers were good enough to keep a Fed rate hike on track for December, but not strong enough to signal a quickening in the pace of Fed hikes,” said AMP’s Oliver. “It’s still going to be very gradual.”

Thai Shares

Thailand’s SET Index tumbled 3.1 percent. The palace said on Sunday that doctors are closely monitoring Bhumibol Adulyadej’s condition. The 88-year-old monarch’s health is closely watched as he is revered by many for what they say has been his unifying presence during a seven-decade reign.

The SET Index has dropped 5.9 percent since the end of August, paring its advance this year to 13 percent. Investors should selectively buy stocks where valuations are attractive, while being cautious as the market will continue to be volatile, said Thanomsak Saharatchai, head of research at KT Zmico Securities Co. in Bangkok. 

Australia’s S&P/ASX 200 Index rose 0.2 percent. UGL Ltd. surged 48 percent in Sydney trading after Cimic Group Ltd., the Australian construction company controlled by Germany’s Hochtief AG, offered to buy the rest of the engineering firm in a deal valuing it at A$524 million ($398 million). New Zealand’s S&P/NZX 50 Index lost 0.7 percent and the Philippine Stock Exchange Index dropped 0.6 percent. Equity markets are closed in Japan, Taiwan and Hong Kong. 

The Shanghai Composite Index gained 1.5 percent, led by energy producers, while a gauge of property developers tumbled after a number of cities imposed curbs to cool surging home prices. South Korea’s Kospi index rose 0.2 percent as Samsung Electronics Co. fell 3.2 percent. The company temporarily halted production of its Note 7 smartphones after U.S. carriers suspended sales and exchanges of the troubled device, Yonhap News reported, citing an unidentified official at a supplier.

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