WATCH: Global markets rally as millions vote in the US presidential election
European and Asian markets are rallying on Tuesday as millions of US citizens are casting their votes to elect their new president.
Across Europe, meanwhile, COVID-19 restrictions are tightening as cases continue to surge, with Italy announcing a new three-tier system that is intended to avoid another national lockdown.
In the UK, the city of Liverpool will be the first to have mass rapid testing, with plans underway for a national rollout in the weeks ahead. A month-long lockdown begins on Thursday, with the government attempting to double down on its financial support for various groups, including the self-employed.
The FTSE’s (^FTSE) rise mirrored other Asian markets, up 2.2% at market close. Germany’s DAX (^GDAXI) rose 2.5%, France’s CAC 40 (^FCHI) added 2.4% in Paris, and the IBEX 35 (^IBEX) gained 2.5% in Madrid.
Despite UK government support schemes, the financial toll of the country’s second lockdown has some concerned.
“The fact is that most of the support is not available in the same way which it was back in March,” said Naeem Aslam, chief market analyst at AvaTrade.
“For instance, mortgage holders who already had their six month holiday cannot reuse the government loan holiday scheme as they have already utilised it. The government is trying to save the UK housing market, but the fact is that with new lockdowns, businesses are likely to be impacted even more, and mortgage holders will not be able to make their payments. Given that there is little to no support to people who have already used the government support programs, a higher default rate is the base case scenario for us.”
All eyes will remain squarely focused on the US election on Tuesday. There will also be data on US factory orders for September and ECB board member Klaas Knot will be speaking.
Both the camps for US Democratic presidential candidate Joe Biden and incumbent leader Donald Trump are already claiming they are in the lead in the election.
WATCH: US election 2020: When will we know the result
It is not just the presidential result that matters, but also who controls both houses of Congress. While the House of Representative are likely to see a win for the Democrats by 97%, according to the FiveThirtyEight poll, they are less likely to succeed in the Senate at a lower 74%.
“Our US economists view that as the most negative outcome for growth next year, because Republican senators would likely remain resistant to a big fiscal package, as they’ve already done in recent weeks even with Mr Trump in the White House,” said Deutsche Bank analysts in a note on Tuesday.
“This contrasts with their view on a Democratic sweep of the presidency and both houses of Congress, which they see as providing the most fiscal stimulus to the economy next year. So it’s clear that control of the Senate will be critical to the policy mix we can expect to see in 2021.”
Asian markets have tracked Wall Street’s lead this morning.
Stock had rallied strongly during the Asian trading session. At market close, Japan’s Nikkei (^N225) was up 1.4%, the Hong Kong Hang Seng (^HSI) gained 2%, and the Shenzhen Component (399001.SZ) rose 1.2%. The Shanghai Composite (000001.SS) was up 1.4%.