* Graphic: 2020 asset performance http://tmsnrt.rs/2yaDPgn
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
By Huw Jones
LONDON, Nov 3 (Reuters) - European stock markets rose in
early trading on Tuesday as investors bet on a clear win for Joe
Biden as the United States votes in its most polarised
presidential election in living memory.
Steady earnings from French bank BNP Paribas BNPP.PA
lifted its shares by 6.5%, adding to a sense that the banking
sector was holding up relatively well to an economic pounding
from the COVID-19 crisis.
But a 40% fall in full-year earnings at Associated British
Foods ABF.L due to a profit plunge in its Primark clothing
business was a reminder of how the pandemic is wreaking havoc
with corporate balance sheets. ABF shares fell 1.7%.
U.S. President Donald Trump and Democratic rival Biden made
a last-ditch push for votes in battleground states on Monday as
their campaigns prepared for post-election legal disputes that
could delay a clear outcome. "Markets are pricing for a Biden win, certainly a clear
outcome, and they want a clear and uncontested outcome," said
Michael Hewson, chief market analyst at CMC Markets.
A shock Trump win, a contested result, or just a divided
outcome could all trigger corrections in markets, he said.
"Control of the Senate is crucial for any 'blue wave'
scenario to materialise, otherwise divided government continues
and fiscal stimulus expectations will need to be scaled back,"
added Alvin Tan, Asia forex strategist at RBC Capital Markets.
The pan-European STOXX 600 index .STOXX rose 1.3% on a
second day of robust gains, having slumped to a five-month low
last week.
Growth-sensitive cyclical sectors such as oil and gas
.SXEP , miners .SXPP and banks .SX7P once again led the
rally - all rising more than 2%
No major European economic data is due on Tuesday, with only
a smattering of earnings to steer investors. BNP bank was buoyed
by a surge in currency and commodity trading to beat third
quarter profit expectations. MARKET MOOD
Analysts said that while the mood was more upbeat on
Tuesday, it remained febrile as European countries introduced
tougher lockdown restrictions to fight a pandemic that was set
to hit the economy further.
Australian's central bank became the latest to take action
to shore up the coronavirus-hit economy, trimming interest rates
to near zero on Tuesday and ramping up its bond-buying plans.
Investors are also waiting on Federal Reserve and Bank of
England meetings this week that are also expected to bring more
support.
"The problem with markets is that they are very binary. One
day everything is hunky dory and the next day it's the depths of
despair and so you have to tread that tightrope between the two
that creates volatility," CMC Markets' Hewson said.
The global tone was helped by gains overnight on a Wall
Street underpinned by U.S. manufacturing activity accelerating
more than expected in October, and Asian equity markets and U.S.
futures ESc1 rallying.
The dollar and gold were little changed as currency and
bullion traders bunkered down ahead of the U.S. election.
MSCI's broadest index of Asia-Pacific shares outside Japan
.MIAPJ0000PUS had added 1.4% overnight. The gauge is less than
1% shy of a 2-1/2 year high struck in mid-October and up over 5%
this year, driven by a 37% rebound from China's markets since
March.
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.
South Korea's main index .KSII advanced 1.7% and Hong
Kong's index .HSI sprinted 2.2% higher.
The MSCI China index hit a 23-year high after Chinese
factory activity expanded the fastest in a decade. Japanese markets were closed for a holiday.
The U.S. dollar hovered just below a one-month high. Against
a basket of currencies =USD it held at 93.996. The
safe-harbour yen JPY= was steady at 104.72 yen per
dollar. FRX/
The Aussie AUD=D3 fell 0.2% and Australia's ASX 200
.AXJO ended 2% higher as the central bank trimmed interest
rates to near zero and expanded its bond-buying programme, as
expected. Oil prices steadied after two weeks of weakness, with Brent
futures LCOc1 down 0.2% at $38.89 a barrel, but hanging on to
most of an overnight bounce. O/R
Gold XAU= eased 0.1% to $1,892.5 an ounce, while the
dollar index =USD held ground at 94.027.
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World stocks market cap rise over last four years https://tmsnrt.rs/2TL19hh
Major world stock indexes over the last four years https://tmsnrt.rs/326YYsP
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