Asian shares hit a three-week high and the dollar extended gains after Barack Obama became the next US president, ending uncertainty about who will lead the world's largest economy in the midst of great financial peril.
US Treasuries fell as investors became bolder in taking risk, though US stock futures remained little changed and oil succumbed to profit-taking after signs of global production cuts had sent crude prices up 10 per cent yesterday.
The new Obama administration, which takes office in January, will face the world's worst financial crisis since the Great Depression, and a potentially steep slowdown in the global economy that has pounded markets from Tokyo to Frankfurt to New York.
Unprecedented measures to rescue banks across the world, aggressive rate cuts by central banks, and the improvements in credit markets have in the last week given global markets a respite from a thrashing, but some still urged caution.
"The knee-jerk complacency rally in Asia to an Obama win is likely creating an opportunity to sell," said Kirby Daley, a senior strategist for Newedge Group in Hong Kong.
"The bottom line is economic fundamentals in the US are deteriorating faster than the market can keep up with. And there is very little an Obama administration can do to shield Asia from the effects of this downturn."
The MSCI index of Asian stocks outside Japan rose for a seventh consecutive session today, with its 3.2 per cent gain as of 0450 GMT placing the index at the highest since October 16th.
The gains came after US stocks yesterday enjoyed their biggest election day rally ever. Tokyo's Nikkei rose 2.6 per cent, led by exporters such as Honda Motor Co that were bolstered by a softer yen, while energy-linked firms such as Mitsubishi Corp gained on the oil price rally.
Markets in Shanghai, Hong Kong and Singapore rose more than 4 per cent each, while stocks in Australia gained more than 2 per cent. South Korea, India and Taiwan saw more muted gains.
Reuters