Global markets tank as USA election results come in

EDGARD GARRIDO  REUTERS 
 
   Stocks plunged as a Donald Trump win became apparent but later recovered

The U.S. currency was little changed versus the Mexican peso at 18.5665, after dropping 2.3 percent on Monday, its biggest one-day drop in six weeks.

Shares had been higher early in Asia's Wednesday trading session but then turned sharply as investors unloaded shares when Donald Trump first gained the lead in the electoral vote count. As of 10.53am in Hong Kong it was trading at 96.87.

(AP Photo/Richard Drew, File).

It was an election night Wall Street didn't see coming. Global stock markets were steady Tuesday, Nov. 8, 2016, following strong Wall Street.

The president-elect pledged to be a president for all Americans, and pledged to get to work immediately.

US stock index futures sank in the overnight session into Wednesday as a market that had been expecting a victory by Democrat Hillary Clinton scrambled to adjust to an upset win by Republican Donald Trump. Kathleen Brooks, research director at Forex.com, says Trump "definitely sounded more presidential than he has done at any stage during the election campaign" during his victory speech, in which he praised Hillary Clinton.

When trading opened in Europe on Wednesday, London's FTSE 100 was down 0.4 percent, Paris and Frankfort exchanges were down about 1.2 percent and the Milan and Madrid markets were about 2 percent lower, the BBC reported Wednesday. The Dow futures in the USA were down 1.7% but that was far less than what was originally anticipated. The S&P 500 was 1.11% higher at 2,163.26 and the Nasdaq was also up by 1.11% at 5,251.07. The Mexican peso likewise tumbled and investors looking for safe assets bid up the price of gold.

CBOE Volatility index futures shot almost 40 percent higher at one point, reflecting investors' reservations over a Trump presidency, but sharply retraced that advance after Trump's acceptance speech. However, by the time Trump was confirmed the victor and made his speech, financial markets had steadied.

Investors generally saw her as a well-known figure whose economic policies would be similar to President Obama's.

With so much uncertainty, investors shifted money out of stock futures and into safe havens. Trump is an outsider and could shake up the way things are run in the USA especially if Congress remains under Republican control.

Global markets tank as USA election results come in

Republican Donald Trump and Democrat Hillary Clinton waged a tight battle in several crucial battleground states on Tuesday in their race for the White House, although opinion polls showed Clinton had an edge in the closing hours of the campaign. Trump has insisted that Mexico will pay for the wall.

Given Trump's stance on NAFTA and immigration, economists have said the Mexican economy could fall into a contraction if he wins.

USA stocks welcomed President-elect Donald Trump by avoiding the crash many had feared.

Investors will begin to look to see if Trump will cause further problems with his rhetoric that helped to polarize Americans and often caused investors to become spooked in the global financial markets.

There is already speculation that the US Federal Reserve Board will have to hold off from increasing interest rates in December, as had been expected, due to the expected market turbulence. Some analysts are ruling it out entirely.

The election uncertainty also jolted currency markets, sending investors fleeing from the dollar.

Another point of interest will centre on the U.S.'s trade relations with China. That follows a tumble during a sell-off after Trump's unexpected victory on Wednesday. Major U.S. benchmarks all finished more than 1 percent higher, with the Dow Jones industrial average near a record high close.

Japan's Nikkei 225 finished 5.4% lower, but the Hang Seng in Hong Kong and the Shanghai Composite - which closed later - lost 2.2% and 0.6% respectively.

An employee of a foreign exchange trading company works in front of a monitor displaying USA presidential election news in Tokyo, Japan, Wednesday.

Top officials from Japan's central bank and finance ministry were to meet later Wednesday to discuss how to cope with the gyrations in financial markets.

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