Pallade Veneta - Stock markets rise, dollar falls as US votes

Wall Street's main indexes, which had fallen the previous day, rebounded in early deals after voting began in the world's biggest economy.

In Europe, London fell as investors await an interest-rate decision by the Bank of England on Thursday while Paris and Frankfurt were slightly up in afternoon deals.

Equities in Shanghai and Hong Kong won strong support from hopes over China's economy.

The dollar weakened against the euro, the British pound and the yen.

"A contested election result could cause volatility on the markets," noted Russ Mould, investment director at AJ Bell.

"Equally, a clear winner quickly after voting ends could provide some relief to investors."

A win for Republican Donald Trump is expected to restoke inflation and send Treasury yields higher owing to his pledges to slash taxes and impose tariffs on imports, which could support the dollar.

Analysts see less upheaval from a win by Democratic Vice President Kamala Harris.

Investors are also awaiting another US Federal Reserve rate cut on Thursday as inflation cools.

"A pro-tariff Trump presidency could see the dollar strengthen amid concerns higher inflation will prompt the Fed to keep interest rates higher," predicted Matt Britzman, senior equity analyst at Hargreaves Lansdown.

"There is likely to be a period of volatility particularly if the result is contested, but investors should keep their eyes on long-term horizons as historically financial markets have risen over the course of both Democratic and Republican presidencies."

Fawad Razaqzada, analyst at City Index and Forex.com, said markets had priced in a Trump win until the start of this week.

"While that could still be the case, Harris has closed the gap to essentially make it a coin flip between the two candidates," he said.

"As things stand it looks like it could be a photo finish. This makes it extremely difficult to make a strong case for the direction of the dollar or stocks this week," Razaqzada said.

- Asia up -

Hong Kong and Shanghai each closed up by more than two percent Tuesday after data showed China's services sector expanded last month at its fastest pace since July.

The news came as traders await the end of a Chinese government meeting this week to hammer out an economic stimulus.

Officials are expected to give the go-ahead to about $140 billion in extra budget spending, mostly for indebted local governments, and a similar one-off payment for banks.

Chinese Premier Li Qiang, meanwhile, said he was "fully confident" that China's economy would hit its growth targets this year and indicated that there was room to do more.

Oil prices gained less sharply, having surged almost three percent Monday after top producers agreed to extend output cuts through to the end of December and on worries about the Middle East crisis.

On the corporate front, Boeing shares fell slightly even though striking workers approved a contract proposal late Monday, ending more than seven weeks of stoppages that underscored discontent in the workforce of the beleaguered US aviation giant.

- Key figures around 1440 GMT -

New York - Dow: UP 0.2 percent at 41,886.63 points

New York - S&P 500: UP 0.5 percent at 5,742.69

New York - Nasdaq: UP 0.8 percent at 18,319.57

London - FTSE 100: DOWN 0.3 percent at 8,163.47

Paris - CAC 40: UP 0.3 percent at 7,390.45

Frankfurt - DAX: UP 0.2 percent at 19,193.13

Tokyo - Nikkei 225: UP 1.1 percent at 38,474.90 (close)

Hong Kong - Hang Seng Index: UP 2.1 percent at 21,006.97 (close)

Shanghai - Composite: UP 2.3 percent at 3,386.99 (close)

Euro/dollar: UP at $1.0910 from $1.0878 on Monday

Pound/dollar: UP at $1.3020 from $1.2954

Dollar/yen: DOWN at 151.84 yen from 152.17 yen

Euro/pound: DOWN at 83.80 from 83.94 pence

Brent North Sea Crude: UP 0.9 percent at $75.77 per barrel

West Texas Intermediate: UP 1.1 percent at $72.23 per barrel

H.Lagomarsino--PV