(Updates prices ahead of European open)
* S&P, European futures whipsawed as U.S. vote too close to
call
* Final result might not be known for a day or more
* Tech stocks gain on talk a Trump win would favour sector
* Dollar rallies, 10-yr Treasury yields down sharply
* Gold retreats, oil clings to gains
* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Marc Jones and Wayne Cole
LONDON/SYDNEY, Nov 4 (Reuters) - Share markets were
whipsawed, while bonds and the dollar rose on Wednesday as
results from the U.S. presidential election proved far closer
than polls had predicted, potentially leaving the outcome in
doubt for days to come.
Democratic contender Joe Biden took to the air to declare he
was still optimistic about winning and called for all votes to
be counted, no matter how long it took.
President Donald Trump responded saying that he had won,
that "they" were trying to steal the election, without providing
evidence, and that he would go the U.S. Supreme Court to fight
for the win if needed.
Investors had initially wagered that a possible Democratic
sweep by Biden could ease political risk while promising a huge
boost to fiscal stimulus.
But the mood quickly changed as Trump snatched Florida and
ran much closer in other major battleground states than polls
had predicted. U.S. equity futures went on a wild ride, rising then
falling, climbing again as the voting seemed to favour Trump
before buckling again in tandem with European futures after
Trump vowed to make a Supreme Court challenge. .EU
"It means possibly quite a lot of volatility," said AXA
Group's Chief Economist Gilles Moec in London.
"As it is not clear, markets are going to overreact to every
tiny piece of news," such as any further talk from Trump or
Biden about legal fights.
(For the latest results and news on U.S. election, click: https://www.reuters.com/world/us-election2020
)
Dealers said investors could be thinking a status quo result
would at least lessen political uncertainty and remove the risk
a Biden administration would roll back corporate tax cuts.
The technology sector seemed encouraged, with NASDAQ futures
rising as much as 2.2% at one point before easing back to 0.6%
up NQc1 . E-Mini futures for the S&P 500 ESc1 dropped 1%
though after Trump's news conference. EUROSTOXX 50 futures
STXEc1 were last down 1.6% having been fractionally higher
just 30 minutes earlier. FFIc1 .
Andrew Brenner, head of international fixed income at
NatAlliance Securities, said the move in techs looked like it
was a play on the Senate potentially staying Republican.
Brenner said that under a Biden win tech stocks were seen
faring worse, partly due to Democrats going after the sector in
hearings and also that a potential rise in capital gains tax
would hit tech stocks harder.
Japan's Nikkei .N225 was ahead by 1.7%, while MSCI's
broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS edged up 0.2%.
Chinese blue chips .CSI300 rose 0.7%, with markets
uncertain how Sino-U.S. relations would develop from here.
Some investors were now hedging against the risk of a
contested election or at least a drawn-out process as mail-in
ballots were counted.
"It's a wait-and-see," said Matt Sherwood, head of
investment strategy at Perpetual in Sydney.
"I think the odds of a clean (Democrat) sweep are
diminishing, almost by the minute. That reduces the possibility,
or the likelihood at least of a large stimulus program being
agreed to in the first days of a Biden administration."
That saw 10-year Treasury yields fall all the way back to
0.81% US10YT=RR , having been at a five-month top of 0.93%.
The U.S. dollar had a roller coaster session, reversing
early losses to be last up 1% on a basket of currencies at
93.902 =USD . The euro fell back hard to $1.1640 EUR= and
away from a top of $1.1768.
The chance of a Trump victory saw the dollar jump 2% on the
Mexican peso MXN= on the assumption U.S. trade policies would
continue to favour tariffs. Norway's crown NOK= and
Australia's risk-sensitive dollar AUD=D3 both tumbled too.
Going the other way, the dollar eased 0.9% on the Russian
rouble RUB= which had been one of the hardest fallers in the
run up to the election.
STILL TO COME
Investors are still awaiting the outcome of U.S. Federal
Reserve and Bank of England meetings this week, which are
expected to at least give a nod to further stimulus.
The Reserve Bank of Australia on Tuesday cut interest rates
to near zero and boosted its bond-buying program, adding to the
tidal wave of cheap money flooding the global financial system.
Gold had recently been buoyed by all this liquidity but ran
into profit-taking on Wednesday, losing 0.6% to $1,896 an ounce.
Oil prices held gains made after industry data showed crude
inventories in the United States dropped sharply. O/R
Dealers noted a returned Republican administration would
likely be more positive for the oil industry than Democrats that
favoured renewable technology.
U.S. crude futures CLc1 were up 90 cents at $38.56 a
barrel, with Brent crude LCOc1 futures gaining 91 cents to
$40.62.
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Asia stock markets https://tmsnrt.rs/2zpUAr4
Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
Key emerging currencies being split by U.S. election https://tmsnrt.rs/326Toa7
Global markets since Trump's election https://tmsnrt.rs/3jNwnis
World stocks market cap rise over last four years https://tmsnrt.rs/2TL19hh
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