GLOBAL MARKETS-Stocks fall as investors brace for possible 'blue sweep' in Georgia

* Democrats could win both races in key Georgia runoffs
* S&P500 futures down 0.8%, Asian shares slip
* Big tech regulation fears push Nasdaq futures down 1.6%
* U.S. 10-year yield hits 1%
* Oil firm after Saudi supply cut

By Hideyuki Sano
TOKYO, Jan 6 (Reuters) - Global stock prices slipped and
bond yields rose on Wednesday as investors braced for the
prospect that Democrats could win both races in a U.S. Senate
run-off election in Georgia, handing them control of the
chamber.
Along with their narrow majority in the House of
Representatives, a "blue sweep" of Congress could usher in
larger fiscal stimulus and pave the way for President-elect Joe
Biden to push through greater corporate regulation and higher
taxes.
While the races were too close to call, with 98% of votes
tallied, Democrat Raphael Warnock held a slight lead over
incumbent Kelly Loeffler while Democratic challenger Jon Ossoff
trailed Republican David Perdue by just 3,600 votes.
"With Biden proposing to reverse President Donald Trump's
tax cut, increase the minimum wage, and strengthen oversight on
various industries, some might argue that his agenda is not
particularly market-friendly," said Vasu Menon, investment
strategy executive director at OCBC Bank in Singapore.
Futures for the S&P 500 EScv1 fell 0.8%, while Nasdaq
futures NQc1 shed 1.6% on fears Democrats could pursue tighter
regulations on big tech firms.
Other industries, such as banks, oil and gas and healthcare,
could come under heavier scrutiny, while infrastructure and
alternative energy sectors could benefit. Japan's Nikkei .N225 fell 0.4% while MSCI's index of
Asian-Pacific excluding Japan .MIAPJ0000PUS erased earlier
gains to trade 0.2% lower.
The 10-year U.S. Treasuries yield rose above 1% US10YT=RR
for the first time since March, on expectations of larger
government borrowing under a Senate where Vice President-elect
Kamala Harris would become a tie-breaker.
"U.S. bonds' reaction reflects growing wariness about
Democrats' victory in the runoffs," said Shogo Maekawa, global
market strategist at JPMorgan Asset Management.
"It is also natural for stocks to fall near-term as there
could be tax hikes and tighter regulations on big techs and so
on. But on the other hand, there should be positive factors as
well, such as more stimulus and further infrastructure
spending."
Vishnu Varathan, economist at Mizuho Bank in Singapore,
expects the falls in shares to be short-lived.
"My suspicion is that the immediate knee-jerk reaction would
be a slightly stronger dollar and a slight setback in equities,
because people are still sizing things up," he said. "I don't
think this is a trade that markets will continue to chase and
extend."
Shanghai stocks extended gains on Wednesday, with the CSI300
index .CSI300 rising 0.5% and reaching its best levels since
2008, shrugging off New York Stock Exchange's chaotic handling
of how it will treat Chinese companies to comply with sanctions
set by the Trump administration.
The exchange made a second sudden U-turn as it says it is
reconsidering its plan to allow three Chinese telecom giants to
remain listed. Oil prices held firm, maintaining their gains of nearly 5%
made on Tuesday after Saudi Arabia offered to make voluntary
cuts to its oil output. Tensions following OPEC member Iran's seizure of a South
Korean vessel also frayed nerves, adding further support to the
market.
Tehran denied on Tuesday it was using the ship and its crew
as hostages, a day after it seized the tanker in the Gulf while
pressing a demand for Seoul to release $7 billion in funds
frozen under U.S. sanctions. U.S. crude futures CLc1 added 0.2% to $50.05 a barrel
having climbed 4.9% on Tuesday.
International benchmark Brent crude futures LCOc1 rose
0.6% to $53.91.
In currencies, the U.S. dollar hit a new low before bouncing
back on the prospects of the "blue sweep" in Georgia.
The euro rose to as high as $1.2328 EUR= , a high last seen
in April 2018, while the yen hit a 10-month high of 102.595 to
the dollar JPY= .
Spot gold XAU= held firm at $1,948.20 an ounce, having
touched a two-month high earlier in the day.
Bitcoin rose more than 5% to hit a record high of $35,879
BTC=BTSP .

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Global assets http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
Emerging markets http://tmsnrt.rs/2ihRugV
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>