Australia, New Zealand shares jump as markets cheer Biden win

(Reuters) – Australia shares finished higher on Monday, after notching their best intraday session since early March, as investors expect the election win for U.S. President-elect Joe Biden to usher in a calmer period of global trade.

A result that would likely leave Republicans still in control of the Senate would also mean legislative gridlock, which could hurt the Democratic agenda of introducing higher corporate taxes and tough financial regulations, analysts said.

With all the major indices trading in the green, the S&P/ASX 200 benchmark index .AXJO rose for a third session to close 1.8% higher.

“Having a Biden presidency probably takes away some of the potential flare-ups in terms of global trade,” said James Tao, market analyst at CommSec.

“This will mean there’s less disruption to taxes and tax reform. That’s certainly something businesses have been rallying on,” he added.

“In terms of relationship with U.S., Australia has always had a very strong relationship so, there’s unlikely to be any major changes. But you could say there’s certainly no downside to it for sure.”

In the home front, Australian mining stocks .AXMM were the biggest gainers, recording their best session since June 16 as iron ore futures surged nearly 5%. [IRONORE/]

Global mining giants BHP BHP.AX and Rio Tinto RIO.AX climbed over 3% each.

The tech sub-index .AXIJ rallied 2.8% to hit a record high with buy-now-pay-later firm Afterpay APT.AX adding as much as 4.5%.

A Biden victory would likely lead to an increase in domestic production of metals used to make electric vehicles, solar panels and other products crucial to his climate plan.

Lifting risk appetite further were comments from the New South Wales state that said it would shift towards renewable energy and aimed to lure A$32 billion ($23.35 billion) of private investment into the sector in the next decade.

Renewable energy stocks such as Genex Power GNX.AX and Hazer Group HZR.AX ended in the positive territory.

Across the Tasman Sea, New Zealand’s benchmark S&P/NZX 50 index .NZ50 ended 1.8% firmer after scaling a record high during the session.

According to a Reuters poll, the central bank is seen holding the official cash rate at 0.25% at a monetary policy meeting on Wednesday.