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Asian share markets turned skittish on Wednesday, paring early gains as results from the U.S. Presidential election showed an agonizingly close race with no clear winner yet in sight.

Investors had initially wagered that a possible Democratic sweep by Joe Biden could ease political risk while promising a huge boost to fiscal stimulus, hitting the safe-haven dollar and bonds.

But the mood sobered on signs U.S. President Donald Trump might snatch Florida and was closer in other major battleground states than polls had predicted.

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“In typical election risk-driven fashion it’s been the stairs up and express elevator down as early results, especially out of Florida, are pointing away from the quick Biden outcome markets were looking for,” said Stephen Innes, Chief Global Markets Strategist at Axi.

“Markets have taken a step back from the Democratic sweep scenario.”

Instead, investors were now hedging against the risk of a contested election or at least a drawn-out process as mail-in ballots were counted.

That saw 10-year Treasury yields drop all the way back to 0.85 per cent, from a five-month top of 0.93 per cent.

E-Mini futures for the S&P 500 veered wildly between negative and positive and were last up 0.3 per cent. Japan’s Nikkei was still ahead by 1.7 per cent, but MSCI’s broadest index of Asia-Pacific shares outside Japan went flat.

The U.S. dollar likewise reversed early losses and gained 0.46 per cent on a basket of currencies to 93.561. The euro eased back to $1.1698 from a top of $1.1768.

Investors are still awaiting the outcome of Federal Reserve and Bank of England meetings this week, which are expected to at least give a nod to further stimulus.

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The Reserve Bank of Australia on Tuesday cut interest rates to near zero and boosted its bond-buying program, adding to the tidal wave of cheap money flooding the global financial system.

This surfeit of liquidity has been a boon for gold, which is tightly limited in supply. The yellow metal ran into profit taking on Wednesday and dipped to $1,902 an ounce, but stayed comfortably above last week’s trough of $1,858.

Oil prices also pared their early gains as the election outcome turned murky.

U.S. crude were up 54 cents at $38.20, with Brent crude futures gaining 46 cents to $40.17.

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