Equities fell as the outcome of US midterm elections remained unclear, while a sell-off of cryptocurrencies paused, following sharp falls in response to the cancelled rescue of embattled crypto exchange FTX.
In Asia on Thursday, Japan’s Topix shed 0.8 per cent, the Hang Seng index in Hong Kong fell 2.1 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 1 per cent.
Those falls came after strong selling on Wall Street, where the broad S&P 500 index fell 2.1 per cent and the tech-focused Nasdaq Composite shed 2.5 per cent, as investors reassessed the impact of tighter than expected midterm races.
In the US on Wednesday, one day after polls closed, elections in multiple states remained uncalled, leaving control of both the Senate and House up in the air. However, analysts said the Republican party’s showing had already undermined convictions about a “red wave” in both legislative chambers that was widely predicted by pollsters.
“Both results suggest more of a ‘red splash’ as opposed to ‘red wave’,” said Aichi Amemiya, senior US economist at Nomura. He added that Republicans were expected to take the House and that “the Senate remains close, but momentum may be with Democrats”.
In crypto markets, cryptocurrencies including bitcoin edged up in morning trading on Thursday after posting double-digit falls in response to the aborted rescue of Sam Bankman-Fried’s FTX exchange by rival Binance.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com,” Binance said in a statement on Wednesday.
The collapse of the shortlived deal between rival Binance and FTX left the latter without a clear path forward and stoked fears of further fallout for crypto assets, which have already been battered this year by the collapse of prominent groups in the sector, such as Three Arrows Capital and the lender Celsius Network.
Bitcoin was up about 2 per cent on Thursday at $16,104, but is down almost a quarter this week, with year-to-date losses of almost 66 per cent.
Futures markets tipped the FTSE 100 to shed 0.3 per cent at the open on Thursday, while the S&P 500 was expected to rise 0.3 per cent.