Election enthusiasm in global markets: US Congress benefited China

The fact that Democrats won the majority in the Senate and the House of Representatives in the US Congress midterm elections, which were closely followed around the world, increased the risk appetite in Asian markets. While political uncertainty has decreased, there have been predominantly positive pricing in the US, European and Asian stock markets, and the possible repercussions of the election results, especially on US-China relations, are being watched carefully.

It is considered that Democrats taking control of Congress may complicate the policies implemented by President Donald Trump's administration and narrow the political space for action. This development had a positive impact on the stock markets by creating expectations in Asian markets that the current trade restrictions against China might ease. Asian stock markets, excluding Japan, followed a buying-oriented trend; In China, the Shanghai composite index increased by 2.16 percent to 3,686 points, the Hang Seng index in Hong Kong increased by 1.67 percent to 23,919 points, and the Kospi index in South Korea increased by 0.62 percent to 5,683 points. In Japan, the Nikkei 225 index lost 1.41 percent of its value and finished the day at 62,192 points.

It is predicted that with the change of power in Congress, Trump may take more cautious steps in foreign policy. Markets now turn their attention to the Asia Pacific Economic Cooperation (APEC) Leaders Summit, which will be held in Shenzhen, China, on November 18-19. While the new political situation in the USA is expected to leave its mark on the summit, possible meetings between Trump and Chinese President Xi Jinping are of critical importance for the commercial future of the two countries.

Asian Markets Analyst Sadi Kaymaz pointed out that the trade ceasefire between Beijing and Washington will end in January and stated that Trump's weakening internally has strengthened China's hand at the bargaining table. Kaymaz said, "China will try to use Trump's political fragility to its advantage. However, Democrats and Republicans are on similar lines regarding China.

Therefore, a Democrat-controlled Congress may relax tariffs but tighten export restrictions in technology areas such as artificial intelligence and chips." Kaymaz also added that curbing Trump's spending plans could alleviate the pressure of high bond interest rates and oil prices for Asian countries.