NEW YORK, Nov 7 — Global stock markets edged higher and the dollar sank to a two-month low yesterday as investors awaited final vote processing in the US presidential election that more and more showed Joe Biden on the verge of winning the White House.

Treasury yields rose on better-than-expected October employment data, while oil prices slid below US$40 (RM165.14) a barrel as new lockdowns in Europe to halt the surging Covid-19 pandemic dimmed the demand outlook.

MSCI’s all-country world stock index rose 0.2 per cent to 592.58, adding to a week-long rally that has seen the benchmark for global equity markets advance more than 7 per cent. The index is on course for its best week in nearly seven months.

In Europe, the broad pan-regional FTSEurofirst 300 index > closed down 0.12 per cent to 1,418.13.

Biden expanded narrow leads over President Donald Trump in the battleground states of Pennsylvania and Georgia, but Georgia ordered a recount that could lead to a long period of uncertainty. Biden was expected to address the nation today, in what could be a victory speech.

Stocks on Wall Street tried to rebound off of profit-taking from the week’s big gains as a Biden presidency appeared inevitable and a sense of resignation settled in at the White House.

"It’s more certain that we’re going to have Biden as president and more importantly we won’t have Trump as there’s so much unpredictability with Trump,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

"The unpredictability of a president makes investing in any area that he can potentially touch, like China, fraught with risk. All a sudden China is a less risky investment without Trump,” Ghriskey said.

Trump vowed to continue his legal fight and said in a statement, "I will never give up fighting for you and our nation.”

The Dow Jones Industrial Average fell 0.29 per cent, the S&P 500 lost 0.11 per cent and the Nasdaq Composite dropped 0.08 per cent.

But a surge in coronavirus cases, both in Europe and the United States, put a damper on the recovery outlook and investor enthusiasm that had embraced a scenario of Republicans retaining control of the Senate during a Biden administration.

"The market perhaps is starting to cheer there being some certainty to the election,” said Subadra Rajappa, head of US rates strategy at Societe Generale in New York.

The 10-year US Treasury note’s yield rose 4.0 basis points to 0.8185 per cent.

"There was some skittishness to the bond market when elections were too close to call. So the risk premium associated with a prolonged election uncertainty gets priced out,” Rajappa said.

Michael Englund, chief economist at Action Economics in Boulder, Colorado, said the US unemployment report raised the prospect for fourth-quarter growth, putting upward pressure on bond yields.

The US unemployment rate fell to a lower-than-expected 6.9 per cent from 7.9 per cent in September, while growth in private payrolls blew past the consensus estimate, adding 906,000 jobs, especially in the hard hit leisure and entertainment sector.

"Overall, it was a very encouraging report. The job market is pretty broadly recovering and recovering better than most forecasters have expected,” said Russell Price, chief economist at Ameriprise Financial Services Inc in Troy, Michigan.

But a 638,000 increase in nonfarm payrolls was the smallest gain since a jobs recovery started in May, a sign the economy still needed stimulus.

Italy’s 10-year yield hit a record low of 0.603 per cent on expectations of further stimulus.

With Covid-19 raging in the United States and parts of Europe, many investors assume more central bank stimulus is inevitable.

The Bank of England expanded its asset purchase scheme on Thursday, while the Federal Reserve kept its monetary policy loose and pledged to do whatever it takes to sustain a US economic recovery. The European Central Bank is widely expected to announce more stimulus next month.

Overnight in Asia, Japan’s Nikkei average rose 0.9 per cent to a 29-year high while MSCI’s broadest gauge of Asian Pacific shares outside Japan rose 0.3 per cent, near a three-year high.

In currency markets, lower yields undermined the dollar, with the dollar index touching a two-month low of 92.182. It fell 0.462 per cent, with the euro up 0.5 per cent to US$1.188.

The Japanese yen strengthened 0.23 per cent versus the greenback at 103.25 per dollar.

Spot gold prices rose 0.21 per cent to US$1,952.64 an ounce. US gold futures settled up 0.3 per cent at US$1,951.70.

Crude prices fell about 4 per cent as fresh lockdowns in Europe to contain the coronavirus darkened the outlook for oil.

Brent crude futures settled down US$1.48 at US$39.45 a barrel. US crude futures fell US$1.65 to settle at US$37.14 a barrel. ­— Reuters