World Markets' Early Reaction to U.S. Elections 2012; Asian Markets Mixed, European Markets Cautious

Early poll results indicating that U.S. President Barack Obama will retain his position as the country's Chief Executive for four more years, that Republicans will remain in control of the House of Representative and Democrats the Senate, will most likely have a muted effect on world markets, CNNMoney reported from Hong Kong early this morning.

"We believe that a status quo scenario is largely baked into stock prices. As such ... we expect stocks to have a modestly negative initial reaction," UBS analysts wrote in a note to clients, as reported by the site.

Based on a survey of professional investors, Barclays’ analysts predicted a win by Obama will result in a “small, short-lived” equities selloff, CNBC reported, as the status quo is maintained. Romney, a businessman and billionaire, was considered to be Wall Street’s favored candidate.

Asian markets were mixed in afternoon trading with Hong Kong’s Hang Seng flat, Tokyo’s Nikkei up 0.1 percent and the Shanghai Composite down 0.2 percent.

Stock markets were higher in Europe this morning, but “there is an element of caution ahead of the presidential election," said analyst Craig Erlam at trading group Alpari UK, as reported by Agence France-Presse. "There is still nothing in it between the two parties, which is only building on the uncertainty we're currently seeing in the markets.”

Now that the U.S. presidential election is out of the way, investors’ focus will shift to the looming deadline of Dec. 31 when spending cuts and tax hikes could go into effect that pitching the country into a recession if Congress cannot come up with an alternate plan.