Asian shares climbed on Thursday and bonds extended their blistering rally as investors wagered the prospect of U.S. policy gridlock would greatly favour some industries while also restraining government borrowing. The risk of a prolonged contested election did remain, though the count was progressing in an orderly fashion with Democratic challenger Joe Biden narrowly ahead in key states. With massive fiscal stimulus likely off the agenda, another wave of near-free liquidity seemed inevitable. “Financial markets are virtually back to the future, with monetary policy driving asset prices ever higher funded by unlimited zero-per-cent central bank money globally, and by the Federal Reserve in particular,” said Jeffrey Halley, a senior market analyst at OANDA. “The election was a victory for higher equity prices, higher commodity prices, higher house prices, a rally in emerging markets and a much lower U.S. dollar.” MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1.7% to reach its highest since February 2018. Japan’s Nikkei rose 1.1% to a nine-month top and South Korea put on 1.7%. Chinese blue chips gained 1.1%, aided by talk a Biden White House might ease back on trade war tariffs. E-Mini futures for the S&P 500 firmed 0.8% and NASDAQ futures 1.4%. EUROSTOXX 50 futures added 0.1% and FTSE futures 0.2%. Both President Donald Trump and Biden have paths to 270 Electoral College votes as states tallied mail-in ballots. Biden remained optimistic on winning while the Republican incumbent filed lawsuits and demanded recounts. (For the latest election results and more coverage, click: https://www.reuters.com/world/us-election2020) Betting sites swung toward Biden as the results trickled in, having earlier heavily favoured Trump. Yet the prospects of the Democrats taking the Senate also dimmed, pointing to deadlock should Biden take the White House. “A Biden win without full Senate support means less risk of regulation and higher corporate/personal taxes,” wrote analysts at Nomura in a note. “Asset market reaction over the past 24 hours confirms this view, with the US10-year yields declining sharply, and U.S. tech/WFH/structural growth stocks outperforming on prospects of less economic aid.”