Asian, European stocks down

Asian stocks fell on Thursday after inconclusive US midterm election results and a cryptocurrency crisis hammered markets.

The uncertainty, especially about how the midterm results would impact inflation, transferred from Wall Street to Asia overnight.

Hong Kong dropped 1.7 per cent while Tokyo shed nearly one per cent and Shanghai also closed lower. Seoul, Sydney, Jakarta and Taipei also fell.

London, Paris, and Frankfurt all opened on Thursday in the red, continuing the slide in European markets.

“A purple dilemma might be the best way to describe the red-blue tangle that emerged Wednesday. It’ll be gridlock, that’s for sure,” Stephen Innes of SPI Asset Management said of the US midterms where the Democrats did better than expected, although Congress will likely be divided.

“Perhaps not the friendliest kind for market participants, many of whom were hoping for a more resounding rebuke of Democrats given inflation realities.”

All eyes are expected to turn to US inflation data, due later Thursday, to gauge the speed of future rate hikes by the Federal Reserve. “US growth looks still too strong to bring inflation down,” Tapas Strickland of National Australia Bank said in a note.

“The ongoing resilience in the (consumer prices) data and stickiness in inflation continue to point to the Fed hiking rates closer to 5.0 per cent or higher.” Fed officials have raised their policy rate to a range of between 3.75 to 4.0 per cent.