(Bloomberg) -- Emerging-market stocks and currencies hastened a decline as U.S. election tallies so far suggested the outcome of the presidential election will be closer than polls had predicted.
The benchmark currency gauge fell 0.5% and the equity index declined 0.6% alongside a slide in U.S. equity futures. The Mexican peso, seen as a key election proxy, fell more than 3% against the dollar, taking the South African rand down more than 1%. The offshore yuan, a key barometer of U.S.-China relations, weakened 1% after gaining by as much 0.5% earlier amid speculation Democratic nominee Joe Biden would emerge victorious.
Read more: Biden-Trump Battle Opens With Easy Wins While Florida Undecided
“We are going to see the market continue to swing from joy to sorrow as the exit polls come out for a while,” said Tsutomu Soma, a bond trader at Monex Inc. in Tokyo. The emerging-market proxy assets will see the wildest moves as the vote unfolds, he said.
Read more: These Are Key Levels for Emerging Markets After U.S. Election
Stocks have rallied this week amid speculation a Biden victory, and potential Democratic sweep of the Senate and House of Representatives, would allow lawmakers to pass a large U.S. stimulus plan and may reduce geopolitical uncertainty. The JPMorgan (NYSE:JPM) Emerging Market Volatility Index, a measure of price fluctuations in developing-nation currencies, rose to the highest level since late September on Tuesday.
©2020 Bloomberg L.P.