BANGKOK (AP) -- Asian stock markets fell Wednesday as traders watched the final hours of a tight U.S. presidential election whose conclusion would allow politicians in the world's biggest economy to refocus on issues other than the campaign.
President Barack Obama was locked in a tight race with Republican challenger Mitt Romney as state-by-state results rolled in after a day of voting Tuesday across the U.S. A winner could be declared by the time stock markets in Asia close.
Traders say one of the most pressing issues facing the U.S. is the looming "fiscal cliff," a combination of higher taxes and government spending cuts that automatically takes effect unless Congress acts by Jan. 1.
Economists have warned that if this so-called fiscal cliff is not avoided, the adverse effects on the economy could push the country back into recession. Deciding the election is the first step toward a resolution.
"Whoever wins will face the colossal task of resolving the looming fiscal cliff but for now markets are hoping for a decisive outcome," Mitul Kotecha of Credit Agricole CIB in Hong Kong wrote in a market commentary.
The outcome of the race could also determine the future course of the U.S. Federal Reserve's economic stimulus measures, since Romney has said that if he is elected, he will not reappoint Fed chief Ben Bernanke when his term expires in January 2014. Romney has spoken critically of the Fed's "quantitative easing" purchases of bonds to lower interest rates and boost growth.
Francis Lun, managing director of Lyncean Holdings in Hong Kong, said he was bracing for an Obama victory based on results so far reported. That means an extension of the status quo.
"Nothing will change. We will have ultra-low interest rates, a $1 trillion deficit, and quantitative easing," Lun said. "Bernanke will keep his job as Fed chairman. As for the fiscal cliff, the president will do something to minimize the effect of tax increases and spending cuts."
And, he added: "There will be less China-bashing. It's always for the challenger to bash China, and for the incumbent to defend China policy."
Japan's Nikkei 225 index, bobbling between gains and losses, rose less than 0.1 percent to 8,979.30. Hong Kong's Hang Seng lost 0.4 percent to 21,867.67. South Korea's Kospi fell 0.2 percent to 1,924.23. Benchmarks in mainland China, the Philippines and Malaysia also fell.
Australia's S&P/ASX 200 rose 0.3 percent to 4,498.40. Benchmarks in New Zealand, Indonesia and Taiwan also rose.
Stocks closed higher on Tuesday as Americans headed to the polls. The Dow Jones industrial average rose 1 percent to 13,245.68. The Standard & Poor's 500 index rose 0.8 percent to 1,428.39. The Nasdaq composite index rose 0.4 percent to 3,011.93.
Investors also watching developments in Greece, where a political crisis could derail an austerity package that is required for the country to receive its next batch of bailout funds. Without the money, Greece faces the prospect of going bankrupt this month and possibly leaving the euro.
Also on the radar: Thursday's opening of China's Communist Party congress — the once-in-a-decade forum to name China's top leadership. Although current Vice President Xi Jinping is almost certain to be China's next leader, markets will be looking for hints on how the new leadership plans to tackle the nation's economic slowdown.
Benchmark oil for December delivery was down 58 cents to $88.13 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $3.06, or 3.5 percent, to finish at $88.71 in New York on Tuesday.
In currencies, the euro rose to $1.2862 from $1.2817 late Tuesday in New York. The dollar fell to 79.96 yen from 80.26 yen.
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