U.S. stock futures pushed higher in European trading hours on Wednesday after incumbent Barack Obama claimed victory in the race for the U.S. presidency.
Erasing a 60-plus-point loss seen in Asia, Dow Jones Industrial Average futures , rose 16 points to 13,217 ahead of European trading.
S&P 500 futures rose 1.7 points to 1,426.90, erasing a 5- point loss from Asia, while Nasdaq 100 futures went from a 3.5-point loss to gain 5 points to 2,678.75.
President Obama captured a second term after winning a number of electoral-vote-rich states and several key battlegrounds. Read: Obama captures second term as president
Stock futures fell sharply in Asia when early polls indicated that Obama was likely to be reelected. Going into the election, an Obama win had been viewed as more favorable for bonds while a Romney win was seen as better for stocks.
“One issue is Federal Reserve policy and quantitative easing,” said Mitul Kotecha, head of foreign-exchange research at Credit Agricole.
Obama’s win “could ultimately mean that QE will continue in its current form,” said Kotecha. “A Romney win may have implied that the Fed would be more restrained,” he added.
“There may also be some concern that Obama will face continued constraints over the fiscal cliff. There may have been an earlier resolution under Romney, although this is no by no means guaranteed,” Kotecha said.
Stock futures were off their worst levels in Asia after Obama’s victory became clear.
Voters `begging for compromise’
BNP Paribas strategists said that they believe that result “reflects an electorate begging for compromise. Consequently, we think we will end up with a broader and more benign compromise on the fiscal cliff, potentially including a lifting of the debt ceiling before year-end.”
Adrian Zuercher, investment strategist at Credit Suisse Asset Management, said, “I would argue that given the still-fragile environment, the market actually prefers stability and continuity.
“If Romney were to deliver on his campaign promises by replacing [Federal Reserve Chairman Ben] Bernanke, this would have caused big uncertainties in the market. Risk appetite would have taken a hit and this would have affected equity markets in general,” he said.
Wall Street rallied on Tuesday as investors anticipated that the election would put an end to the uncertainty that came with the presidential campaign. Read: U.S. stocks rally as election nears end
The U.S. dollar was broadly lower across the board and extended those losses as European trading was about to get underway. The U.S. dollar index fell to 80.299 from 80.606 in late North American trading on Tuesday.
Crude oil for December delivery pared losses seen in Asia, to down 13 cents to $88.58 a barrel from a loss of 32 cents on the New York Mercantile Exchange. Oil jumped more than 3% on Tuesday in New York.
Gold for delivery in the same month added to an $8.60 gain seen in Asia, trading up $12.90 to $1,727.70 an ounce.
Marketwatch
