* Asian shares hit 3-week high as U.S. election concludes
* Dollar recovers after steep slide in prior session
* Oil falls on profit-taking after previous day rally
(Repeats to additional subscribers with no change to text)
By Rafael Nam
HONG KONG, Nov 5 (Reuters) - Asian shares on Wednesday hit
their highest in three weeks as investors welcomed the
impending end to the uncertainty around the U.S. presidential
election, while resource firms rose on the back of an overnight
surge in oil prices.
The dollar recovered after suffering its biggest one-day
slide in 13 years on Tuesday, as some of the bolder risk-taking
that had investors searching for higher yielding currencies
abated somewhat in Asian trade.
Votes for the U.S. presidential election were being counted
through the Asian morning session, and a conclusion could
remove a key uncertainty over who will lead the world's biggest
economy amidst the worst financial crisis since the Great
Depression.
As a result, U.S. stocks on Tuesday enjoyed their biggest
election day rally ever, helped as well by the U.S. Treasury
Department's plans to expand its capital injection programme to
include specialty finance firms.
Aggressive rate cuts by central banks worldwide and
improvements in the credit markets have given global markets a
respite from a thrashing, but investors are still bracing for
what could potentially be a steep slowdown in the global
economy.
"As the U.S. presidential election comes to an end, many
political uncertainties are set to clear and optimism is
brewing in markets over the new incoming administration," said
Park Hyo-jin, a market analyst at Goodmorning Shinhan
Securities.
The MSCI index of Asian stocks outside Japan
<.MIAPJ0000PUS> rose for a seventh consecutive session on
Wednesday, with its 3.2 percent gain as of 0220 GMT placing the
index at the highest since Oct. 16.
Tokyo's Nikkei <> rose 2.8 percent, led by exporters
such as Honda Motor Co <7267.T> that were bolstered by a softer
yen, while energy-linked firms such as Mitsubishi Corp <8058.T>
gained on the oil price rally.
Markets in South Korea <>, Hong Kong <> and
Singapore <.FTSTI> rose more than 4 percent each. Stocks in
Shanghai <> and Australia <> also rallied, while
Taiwan <> rose 1.4 percent.
Democrat Barack Obama scored a big win against Republican
John McCain in Pennsylvania on Tuesday, though the White House
rivals were running close in other key battleground states that
will decide the next U.S. president. []
"Assuming that Obama is elected, we expect the new
administration to take a more protectionist stance in its
trading policies," said Erin Kim, a market analyst at Woori Inv
& Securities in Seoul.
"But we are not likely to see the kind of aggressive stance
taken by the U.S. in the 1980s, given that overly protectionist
trading will further deepen a slowdown in global economies."
DOLLAR AND RISK
The improving appetite for risk was also evident by the
steep decline in the dollar on Tuesday when it posted its
biggest-day slide against the euro since that currency's 1999
launch.
"The Dow rose and there were some moves toward taking risk,
and that tends to trigger dollar selling," said Hiroshi
Yoshida, a currency trader for Shinkin Central Bank in Japan.
"But it is not as if risk taking will continue to increase
unabated," Yoshida said, adding that concerns about the outlook
for the global economy were likely to keep investors cautious.
The dollar index was up 0.3 percent against a basket of
major currencies, to 84.773 <.DXY>. The U.S. currency inched up
0.2 percent against the euro to $1.2960 <EUR=> on trading
platform EBS.
Oil <CLc1> fell about $1 to $69.47 a barrel as investors
took profits after prices leapt 10 percent in the previous
session following signs that Saudia Arabia and other OPEC
members had made promised cuts in crude production.
(Editing by Dhara Ranasinghe)
