The Zhitong Finance App learned that there are still about two weeks left until the US election. Morgan Stanley believes that in addition to 2020 being affected by the pandemic, the “election year” will generally bring the richest returns to Asian or emerging market stock markets, but based on relatively high market valuations, which are expected to bring downside risks to Asian stocks as the general election approaches, it is recommended to adopt defensive arrangements to reduce stock exposure and “increase” India, ASEAN and South Africa.

As central banks around the world enter a loose monetary policy cycle, the global stock market has been rising since this year, and the MSCI Asia Pacific market sales rate is close to an all-time high. According to the Daimo Index, in addition to 2020, which was driven by the epidemic stimulus policies, Asian and emerging market stock markets have recorded the best returns since 2001 this year, especially the Japan Eastern Stock Exchange Index (TOPIX). Korea's KOSPI Index has performed well. Therefore, the bank believes that as the US election approaches, it will bring downside risks to Asian stocks.

According to Dama statistics, the average daily volatility of the Indian, Mexican, and South African stock markets increased 3 to 6 times around election day. It is believed that the US election will also bring similar volatility to Asian stock markets. Damo suggests investors reduce their exposure to stocks, shift to more local and defensive markets, industries and companies, maintain “increased” holdings in India, ASEAN and South Africa, and prefer essential consumer goods, utilities and telecommunications stocks.