Most Asian stocks drop as Clinton's lead slips, boosting the yen

People walking past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange in front of a securities company, on Aug 29, 2016.
People walking past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange in front of a securities company, on Aug 29, 2016.PHOTO: AFP

SYDNEY (BLOOMBERG) - Most Asian stocks fell on Monday (Oct 31) after some polls showed Hilary Clinton's lead over Donald Trump narrowed ahead of the US presidential election next week after the FBI said it's reopening an investigation into her use of emails.

The dollar-denominated MSCI Asia Pacific Index rose 0.2 per cent to 138.97 as of 9:04am in Tokyo. Two stocks fell for each that rose on the benchmark gauge. Japan's Topix index retreated 0.4 per cent as the yen climbed against the dollar, curbing the earnings outlook for Tokyo-listed exporters.

Asia-Pacific shares are on course for the biggest monthly loss since May as mixed corporate results and the increasing chance of a US interest-rate increase, against the backdrop of the US race for the White House, kept an equities rally in check after the index climbed to a 2016 peak last month.

US shares fell in the final hour of trading on Friday as news broke that the FBI had reopened its investigation into Clinton's use of an unauthorized e-mail server, an issue that has dogged her campaign. An ABC/Washington Post tracking survey Sunday gave Clinton 46 per cent support from likely voters, to Trump's 45 per cent. Clinton was ahead by 12 points a week ago.

"The race remains very tight and markets are far too complacent about the end result," said Matthew Sherwood, head of investment strategy in Sydney at Perpetual Ltd, which manages about US$21 billion. "If the polls tighten more, or the FBI investigation dominates the headlines, there could be a recalibration in market prices this week."

New Zealand's S&P/NZX 50 Index lost 0.3 per cent and Australia's S&P/ASX 200 Index fluctuated. South Korea's Kospi index fell 0.5 per cent. E-mini futures on the S&P 500 index declined 0.1 per cent. Markets in India and the Philippines are closed on Monday, while those in China are yet to open.

Meanwhile, Japan's industrial production was unchanged in September from a month earlier, falling short of forecasts, before the Bank of Japan board gathers this week to consider monetary policy. Retails sales were also unchanged, reflecting sustained weakness in consumer spending.

While the ABC/Washington Post showed Clinton's advantage waned, other data suggest Democrats in key states are unmoved, a sign Clinton is holding together a coalition that has kept her in the lead for months. A CBS/YouGov survey of likely voters across 13 battleground states showed that 1 percent of her supporters were less likely to vote for her after the FBI disclosure.

Energy producers declined after OPEC failed to finalize a proposal to implement supply cuts. Crude sank 0.7 per cent, extending Friday's 2.1 per cent slide.