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* Futures: Nasdaq falls 1.15%, S&P 0.14%, Dow 0.29%
January 6 (Reuters) – Futures following the Nasdaq 100 index fell more than 1% on Wednesday as investors had a price expected for Democrats to win both races in the Senate election in Georgia that will determine the balance of power in Washington.
Edison Research convened one of the races for Democrat Raphael Warnock, ousting current Kelly Loeffler, while challenging Democrat Jon Ossoff maintained a narrow lead over Republican David Perdue in the other, with 98% of the vote counted .
A Democratic-controlled Senate would give President-elect Joe Biden more leeway to act on his reform plans, including the new COVID-19 stimulus, but it could also mean higher corporate taxes and stricter regulations on technology megacaps: policies that are not usually favorable to Wall Street.
“A‘ blue wave ’may not be a bad outcome for markets, as decisive fiscal action will help accelerate the economic recovery,” said Vasu Menon, executive director of investment strategy at OCBC Bank, Singapore.
“This will be largely bullish for risky assets, particularly equities, credit, commodities and emerging market stocks.”
At 2:06 am ET, Dow e-minis were up 89 points, up 0.29%. Dow components of blue technology are generally expected to benefit from a recovery in economic activity.
The S&P 500 e-minis fell 5.25 points, or 0.14%, and the Nasdaq 100 e-minis fell 147 points, or 1.15%.
Hopes for a vaccine-fueled economic recovery in 2021 had pushed major Wall Street indices to record highs in late December, but sentiment has recently been affected by the discovery of a more contagious variant of coronavirus and recent restrictions.
Analysts also expect the market to consolidate gains from December to January, as asset managers try to rebalance their portfolios that had been heavily leaning toward equities. (Report by Sagarika Jaisinghani in Bengaluru; Additional Report by Scott Murdoch in Hong Kong; Edited by Sriraj Kalluvila)