Financial Markets Plunge As Trump Emerges Victorious

European markets are popping higher on Thursday morning, seemingly shrugging off any anxiety over Donald Trump’s shock election victory on Wednesday.

In oil markets, Brent crude traded at around $46.47 a barrel on Thursday morning, up 0.24 percent, while US crude was around $45.10 a barrel, down 0.38 percent. An ounce of gold was up 2.4 percent at $1,305 while the dollar reversed earlier losses to trade 0.1 percent higher at 0.9783 Swiss franc.

Though there remains a great deal of uncertainty over the geopolitical, immigration and trade policies of Trump, investors appeared to be soothed by the victory speech he made where he praised his opponent Hillary Clinton and he urged all Americans to unite as one following a campaign season that was deeply divisive.

“It was Trump’s acceptance speech that sparked the fierce turnaround as he calmed fears”, pointed out James Hughes, chief markets analyst at GKFX.

“Less chance of a Fed rate hike also helps keep investors smiling at the prospect of cheap money and accommodative global monetary policy stance for a while longer”, said Mike van Dulken, an analyst at Accendo Markets. The broad Standard & Poor’s 500 stock index, which was down 5% overnight and hit a trading halt created to limit losses, also so trimmed its steep declines and was down 0.3%. “For example, investors and markets would likely be concerned if Janet Yellen leaves the Federal Reserve early given some of Donald Trump’s rhetoric during the campaign”, he said.

The Stoxx Europe 600 index was down 2.2 percent, while Germany’s main DAX index opened 2.9 percent lower. In currency markets, the dollar rose to 104.56 yen from 105.05 yen, while the euro weakened to $1.0961 from $1.1016.

But the lack of clear policy details has left many worldwide uneasy over the future direction of the USA economy.

Top officials from Japan’s central bank and finance ministry met Wednesday to discuss how to cope with the gyrations in financial markets.

The pound has strengthened against the dollar, rising 0.6% to go back above $1.24, while the euro is also 0.6% higher against the United States currency.

Investors after the election quickly shifted to focus on Trump’s priorities, including tax cuts, an increase in defence and infrastructure spending, and bank deregulation. Pre-opening trading in Dow futures was down 4.6 percent at one point but recovered more than half its losses as the night wore on.

Shares are tumbling across Asia, with the Nikkei 225 index in Tokyo down 4.4 percent at 16,410.55. India’s S&P BSE Sensex Index was up 1.6 percent.

The Mexican peso, which has been a proxy for Trump, was down sharply against the dollar, after rallying during the US trading day.

But the volatility subsided as several sectors poised to benefit from Trump’s victory posted big gains, including the pharmaceutical and bio-tech industries, which had seen sharp declines in their stock prices on the expectation that Clinton would become president. Markets had opened solidly higher but quickly shed those gains, reflecting investor concern over what a Trump presidency might mean for the economy and trade. The exception was the Mexican peso, which swooned 10.7 percent to 20.31 pesos to the dollar. The other two major indices, the broader Standard & Poor’s 500-stock index and the tech-heavy Nasdaq, were both up roughly 1 percent. The Shanghai Composite index lost 0.6% to finish at 3,128.37.

“What you’re seeing is healthcare companies which had been threatened by some of Hillary Clinton’s policies actually recovering quite strongly”, Ben Ritchie, senior fund manager at Aberdeen Asset Management, told the BBC.