ASX rises as investors factor in a Harris victory

The Aussie share market rallied strongly off the back of an unexpected polling result out of the US.

The Australian sharemarket rose strongly on Monday after investors factored in a greater chance of a Kamala Harris victory in this week’s US Presidential election.

The benchmark ASX 200 index 45.80 points, or 0.56 per cent, to close at 8164.60 points.

The broader All Ordinaries rose by 43.10 points, or 0.51 per cent, to finish the trading session at 8422.80 points.

The Australian dollar rose 0.73 per cent to 66 US cents. The rise in the Aussie dollar follows October being the worst month of trading since September 2022, as the dollar fell 4.8 per cent.

Australia’s sharemarket started the week on the front foot, following a positive lead from Wall Street, although investors are being warned the markets will be volatile throughout the week until there is clarity on the US election.

Utilities and industrial led the rally, although broadly nine of the 11 sectors traded higher, with only materials and energy falling.

The Aussie markets have responded positively to a shock poll out of Iowa that suggests Kamala Harris could win the state. Picture: NewsWire / Max Mason-Hubers

The Australian big four banks all traded up off the back of mixed results out of Westpac. While the bank flagged profits fell 3 per cent to $7bn, they also said the number of customers on hardship payments haven’t spiked even with cost of living pressures.

After the announcement Westpac rose 0.93 per cent to $32.40, while CBA, NAB and ANZ were up 1.59, 1.31 and 0.61 per cent respectively.

Aussie markets overall were trading up the back of an Iowa poll which suggested Democrat candidate Kamala Harris could win the state.

Markets have since cast doubt on a Donald Trump victory, given he won Iowa twice, which subsequently unwound some of the Trump-trade and predictions of sanctions on the Chinese economy.

Trump and his campaign have denied the polling data, saying his team is up 10 points in the state.

Even so, Asian asset prices and the Australian dollar lift as Harris has a more favourable policy towards China.

IG market analyst Tony Sycamore said Trump’s tariffs on China were bad for the Australian dollar and the ASX 200 given how resource dominant Australia’s market is.

“We are getting a bit of a relief rally on Australian markets. Certainly the Aussie dollar is breathing a sigh of relief, looking at a get out of jail free card. It was down 4.8 per cent in October.”

The Australian dollar is up following a weak month of trading during October. Picture: NewsWire / Max Mason-Hubers

“Around the 21st of October markets priced in a 48 per cent of a Republican sweep and that has since eased to about 38 per cent. The pairing back of a Trump victory has supported the Aussie dollar and the ASX 200,” he said.

Mr Sycamore said investors like certainty which could see more volatility in the markets if the Democrats do not hold office.

“The status quo stays in place if the Democrats win and that is probably the most reliable path higher for the ASX 200.

“Whereas with the Republican sweep, we don’t know what we will get first, tariffs or tax cuts.”

Originally published as ASX rises as investors factor in a Harris victory