Global shares plunge on possible Democrat domination in U.S. Senate

Global share markets recorded a subdued performance, while bond yields advanced on Wednesday. This came after investors’ sentiment was affected by the possibility of Democrats dominating the U.S. Senate, raising fears of higher taxes and tighter regulations on big tech firms.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed initial gains to trade 0.2% lower. Japan’s benchmark index, on the other hand, saw a 0.4% drop.  S&P 500 e-mini futures tallied a 0.8% loss, while futures for the Nasdaq plunged 1.6%.  

The 10-year U.S. Treasuries placed above 1% for the first time since March. This was mainly from investors’ optimism over the Senate’s massive government borrowing. Moreover, larger fiscal stimulus, intensive corporate policies, and higher taxes can be expected should Democrats win both races in a run-off election in Georgia.