Global stock prices slipped and bond yields rose on Wednesday as investors braced for the prospect that Democrats could win both races in a U.S. Senate run-off election in Georgia, handing them control of the chamber.
Along with their narrow majority in the House of Representatives, a “blue sweep” of Congress could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.
While the races were too close to call, with 98% of votes tallied, Democrat Raphael Warnock held a slight lead over incumbent Kelly Loeffler while Democratic challenger Jon Ossoff trailed Republican David Perdue by just 3,600 votes.
“With Biden proposing to reverse President Donald Trump’s tax cut, increase the minimum wage, and strengthen oversight on various industries, some might argue that his agenda is not particularly market-friendly,” said Vasu Menon, investment strategy executive director at OCBC Bank in Singapore.
The pan-European Stoxx 50 climbed down by 0.48% to 3,547.15. In the cash markets, the DAX futures Germany was trading 0.55% lower at 13,651.15. CAC 40 futures in France climbed down by 0.44% to 5,564.60, while the FTSE 100 futures in the U.K. rose by 0.61% to 6612.25,at the time of writing.