Major stock exchanges in Europe rose on Wednesday and US stocks posted early gains as investors viewed the prospect of a divided Congress for the next two years as positive for equity markets, according to initial market reports.
WASHINGTON (Pakistan Point News / Sputnik - 07th November, 2018) Major stock exchanges in Europe rose on Wednesday and US stocks posted early gains as investors viewed the prospect of a divided Congress for the next two years as positive for equity markets, according to initial market reports.
London's FTSE 100 index, Germany's DAX and France's CAC 40 all gained about 1 percent, and the US Dow Jones Industrial Average opened up 220 points.
"The Democrats have wrested back control of the US House of Representatives, while Republicans have expanded their Senate majority," Gavekal Research commented on its website. "Hence, the US's bicameral legislature is set for two years of gridlock. This was the most benign result possible from this midterm election. While largely expected, confirmation is probably positive for risk assets."
Analyzing markets and election data going back to 1970, a Congress in which Republicans control one chamber and Democrats the other was the best scenario, with the broad-based S&P 500 index up nearly 20 percent, on average, one year later, according to Dow Jones Market Data, as cited by Fox business news.
