SENTIMENT was cautious in Asian stock markets yesterday ahead of the US presidential election today, with most indices showing little movement and shares thinly traded.
The KL Composite Index (KLCI) inched up 2.9 points to 864 on volume of 325 million shares.
Elsewhere, the Tokyo Nikkei 225 fell 37 points to 10,735, Hong Kong's Hang Seng Index rose nearly 40 points to 13,094 and Singapore's Straits Times Index lost almost two points to 1,978.
Analysts expect the Asian markets to continue to trade in the same manner until the outcome of the US polls is known.
The market consensus is that Wall Street would head higher should incumbent George W. Bush win, as the Republican is generally perceived as being pro-business.
Analysts said a John Kerry victory would create some uncertainties amid expectations that he might make changes in US economic and political policies.
Pacific Mutual Fund Bhd chief investment officer Geoffrey Ng, however, believes that the outcome of the presidential election would not have a direct impact on the local bourse.
“The two candidates have so far not mentioned any particular policy targeting Malaysia or Asia as a whole,'' he said.
Indeed, the investing public is more concerned over whether the outcome of the election would be known immediately, instead of which candidate would be moving into the White House.
The concern of investors is that there would be a repeat of the 2000 race, which dragged on for more than a month because of legal wrangling over voting irregularities in Florida.
“It is quite likely to happen again given that most national survey results in the US show that the race is very close,'' said TA Securities head of research C.K. Ngu.
The long drawn vote counting process four years ago had dampened sentiment on global markets. During that period, many Asian stock markets, including Bursa Malaysia, fell sharply in tandem with the downtrend on Wall Street.
The KL Composite Index (CI) fell 43 points or 6% to a low of 709 points on Nov 23, 2000 from 752 points recorded on Oct 30 that year while the US Dow Jones Industrial Average plunged more than 400 points during the election month.
Fortress Capital Asset Management fund manager Michael Lai agreed that the outcome of the election would not carry much weight on the local stock market.
“It is more important to gauge how the oil market reacts to the election results,'' he pointed out, adding that crude oil prices remained the wildcard in global stock markets.
The US light sweet crude rose 51 US cents to US$52.27 a barrel in early Asian trading yesterday, recovering from Friday's low of US$50.47 low – the lowest level since Oct 5.
However, Lai believes that things were pointing to a lower demand for oil. Hence, he expects crude oil prices to ease off in the coming months.