By Ese Erheriene

Shares fell sharply across Asia on Wednesday, as a new poll showing Republican candidate Donald Trump leading the U.S. presidential race spooked investors.

Japan's Nikkei Stock Average sank 1.7% in midmorning trade, after opening at a seven-day low of 17238 points. Australia's S&P/ASX traded 1.3% lower, having earlier hit a seven-week low. Elsewhere, Hong Kong's Hang Seng Index declined 1.3%, the Philippines PSE index fell 1.5%, Taiwan was down 1.1% and the Shanghai Composite Index was off 0.5%.

"The market in Asia is reacting badly to the ABC/Washington Post poll," said Tareck Horchani, deputy head of APAC sales trading at Saxo Markets. "If Trump wins, it looks like we could get a massive selloff as the market is overall long risk assets."

Overnight, an ABC News/Washington Post tracking poll showed Mr. Trump with a one-point advantage over Democrat Hillary Clinton, leading 46% to 45%.

U.S. stocks broadly fell as investors pulled back from risk, which spilled over into the Asian session. The Mexican peso, highly sensitive to developments in the U.S. presidential race, weakened to its lowest level since Oct. 7 and was last down 0.7%. The Korean won fell 0.3%. Analysts and investors generally view Mrs. Clinton as the more market-friendly candidate.

In Japan, financial and exporter stocks were hit particularly hard as investors digested what a win for Mr. Trump would mean for markets, given his dislike of many existing U.S. trade agreements. Among individual shares, Sumitomo Mitsui Financial shed 2.8% of its value, Mitsubishi UFJ Financial fell 2.3%, Suzuki Motor was down 2.3% and Honda Motor slid 3.6%.

Safe-haven buying was seen across assets, with the Japanese yen up 0.3% versus the dollar, the Swiss franc rising 0.2% against the U.S. currency, spot gold gaining 0.2%. Confidence in the probability of a U.S. interest-rate increase by the Federal Reserve in December dropped to 73.6% from 78.0% a day earlier.

The selling and flight to safety occurred despite bullish manufacturing data out of the U.S., Mr. Horchani said.

The Institute for Supply Management said late Tuesday that its purchasing manufacturers index rose to 51.9 in October from 51.5 in September, signaling that the U.S. manufacturing sector could be stabilizing after two years of challenging conditions.

Meanwhile, persistent skepticism that the Organization of the Petroleum Exporting Countries will stick to their provisional production-cutting agreement continued to weigh on oil prices, depressing the share prices of regional producers. Brent, the global benchmark, was last down 0.7% at $47.80 a barrel. In Australia, Santos was down 2.6%, while Japan Petroleum was off 2.2% and Hong Kong's PetroChina slipped 2%.

In one of the few bright spots, New Zealand's jobless rate fell 4.9% to its lowest level in almost eight years in the three months to September, Statistics New Zealand said Wednesday. The GlobalDairyTrade Price Index also soared to 11.4% from 1.4% previously, boosting sentiment for New Zealand's dairy-producing economy. Still, the country's main index followed the regional trend, trading down 1%.

"The Kiwis posted some solid data," said Alex Wijaya, senior sales trader at CMC Markets, in a note.

Elsewhere, shares in Thailand were muted amid reports that Crown Prince Maha Vajiralongkorn could ascend to the throne next month, after the death of King Bhumibol Adulyadej, the world's longest-serving monarch, in October. The benchmark SET Index was down 0.2%.

In South Korea, President Park Geun-hye's just-announced partial cabinet reshuffle wasn't expected to cause ripples in the current policy, analysts said. Ms. Park nominated a new prime minister, a finance minister and a new head of the Ministry of Public Safety. Korea's Kospi was recently down 1.3%, as the export-heavy nation reacted to the latest U.S. presidential polls.

Looking ahead, the markets will be focusing on the U.S. Federal Open Market Committee meeting on interest rates later in the global trading day. According to CME Group's FedWatch tool, the likelihood the Fed will announce a rate change is just 7.2%.

Anna Louie Sussman, Akane Otani and Kwanwoo Jun contributed to this article.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

November 02, 2016 00:41 ET (04:41 GMT)

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