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* Futures: Nasdaq down 1.15%, S&P down 0.14%, Dow up 0.29%
Jan 6 (Reuters) – Futures tracking the Nasdaq 100 index fell more than 1% on Wednesday as investors discounted the prospect of Democrats winning both races in a Senate election round in Georgia, which pushed the balance of power in Washington. will determine.
Edison Research called one race for Democrat Raphael Warnock, letting the incumbent Kelly Loeffler go, while Democratic challenger Jon Ossoff was a small lead over Republican David Perdue in the other with 98% of the vote.
A Democrat-controlled senate would give President-elect Joe Biden more leeway to implement his reform plans, including new COVID-19 incentives, but it could also lead to higher corporate taxes and tighter regulation of the technology megacaps – policies that generally not preferred by Wall Street.
“A ‘blue wave’ may not be a bad outcome for the markets as decisive fiscal measures will help accelerate the economic recovery,” said Vasu Menon, OCBC Bank’s executive director of investment strategy, Singapore.
“This will generally be optimistic for risky assets, especially emerging market equities, credit, commodities and securities.”
By 2:06 a.m. ET, Dow’s e-minis were up 89 points or 0.29%. In general, constituents of the blue chip Dow are expected to benefit from a pick-up in economic activity.
S&P 500 e-minis were down 5.25 points, or 0.14%, and Nasdaq 100 e-minis were down 147 points, or 1.15%.
Hopes of a vaccine-fueled economic recovery in 2021 had pushed Wall Street’s major indices to record highs in late December, but sentiment has recently been tarnished by the discovery of a more contagious variant of the coronavirus and the latest restrictions.
Analysts also expect the market to consolidate December gains into January as asset managers seek to rebalance their portfolios, which were heavily stock-oriented. (Report by Sagarika Jaisinghani in Bengaluru; additional reporting by Scott Murdoch in Hong Kong; edited by Sriraj Kalluvila)