GLOBAL MARKETS-Asian shares in broad-based rally on eve of U.S. election

* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* MSCI Asia-exJapan index gains 1 pct
* U.S. stocks end higher ahead of Tuesday's election

By Anshuman Daga
SINGAPORE, Nov 3 (Reuters) - Asian shares got off to a
strong start on Tuesday, with investors buoyed by strong factory
output data from major economies, while the dollar and gold held
ground on political uncertainty ahead of U.S. elections.
President Donald Trump and Democratic rival Joe Biden made a
last-ditch push for votes in battleground states as their
campaigns prepared for post-election disputes that could prolong
a divisive presidential election. U.S. stock futures traded higher, even though many market
participants expect short-term volatility, especially after a
jittery week. S&P 500 futures ESc1 rose 0.5%, EUROSTOXX 50
futures STXEc1 gained 1% and FTSE futures FFIc1 put on 0.9%.
Strategists at Blackrock Investment Institute said polls
were suggesting a greater likelihood of a Democratic sweep in
the election.
"We are starting to incorporate themes we believe would
outperform in that event, moving toward a more pro-risk stance
overall despite last week's market pullback," the strategists
said in a report.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS added 1%, up for the second straight day. The
gauge is just 1% shy of a 2-1/2 year high struck in mid-October
and up 5% so far this year.
South Korea's main index .KSII advanced 1.7%, markets in
Hong Kong .HSI and Sydney .AXJO rose 2% and Chinese blue
chips .CSI300 put on 0.8%. Japanese markets were closed for a
holiday.
"We are upgrading Asia ex-Japan equities and Asia fixed
income to overweight, as China and other Asian economies have
done a better job of containing COVID–19 and are further ahead
in the economic restart," BlackRock Investment Institute said.
"We expect this dynamic to continue over the months ahead."
Data showed economic activity was improving across the
board.
U.S. manufacturing activity accelerated more than expected
in October, with new orders jumping to their highest in nearly
17 years, while Chinese factory activity expanded the fastest in
a decade and euro zone manufacturing also sped up. Analysts said the prospect of no immediate winner in the
presidential race was the biggest drag on markets. Trump trails
Biden in national opinion polls, but polls in the swing states
that will decide the election show a closer race.
"The key for the stock market in the short-term is a concern
over an uncertain and timely election result and the possibility
of a disputed outcome," said Marc Chaikin, founder of Chaikin
Analytics, a quantitative investment research firm based in
Philadelphia.
Australia's ASX 200 .AXJO gained the most in three weeks
ahead of a widely anticipated cut in the benchmark interest rate
by the country's central bank. Oil prices steadied after two weeks of selling, with Brent
futures LCOc1 down 0.1% to $38.90 a barrel, but hanging on to
most of an overnight bounce. O/R
Still, the uncertainty of the U.S. election and a resurgence
in COVID-19 cases in Europe and the United States supported the
dollar and gold prices, as some investors sought safety.
Gold XAU= was firm at $1,895.6 an ounce, while the dollar
index =USD held ground at 94.027.
U.S. Treasury yields were little changed as investors braced
for an eventful week with central bank meetings by the Reserve
Bank of Australia, the Federal Reserve and Bank of England, as
well as the release of U.S. jobs data for October.