Global stocks rebound sharply after FBI clears Clinton over email
LONDON: Global equities rebounded sharply yesterday, the eve of the US presidential election, after the Federal Bureau of Investigation (FBI) handed market favourite Hillary Clinton a major boost by ruling out criminal charges.
Asian and European equities surged as traders breathed a sigh of relief after FBI chief James Comey said Democratic nominee Clinton would not face charges over her use of a private email server, dealing a blow to her Republican rival, Donald Trump.
In European trading at 1445 GMT, Frankfurt and Paris both gained 1.7%, while London added 1.3%.
In Asia earlier, Tokyo’s Nikkei ended 1.6% higher while Hong Kong closed up 0.7%, with banking giant HSBC more than 2% higher after it reported a forecast-beating rise in pre-tax profit.
Shanghai closed up 0.3%, Sydney added 1.4% and Seoul gained 0.8%, while Singapore put on 0.5%.
In New York, US stocks jumped about 1.5% in early trading, joining the global rally.
About an hour into trading, the broad-based S&P 500 was up 1.7%, tentatively snapping a nine-day losing streak. The Dow Jones Industrial Average was up 1.5% while the tech-rich Nasdaq Composite Index gained 2.0%.
The Mexican peso staged a stunning rally against the dollar to recoup all its losses from last week. The currency is considered a reflection of Trump’s chances because of his anti-Mexican rhetoric.
“European equity markets are... boosted by the news that the FBI has not changed its conclusion on the Hillary Clinton email investigation after announcing a little over a week ago that it had been reopened,” said Oanda analyst Craig Erlam.
“The timing of FBI director James Comey’s disclosure has once again dealt a serious blow to Donald Trump’s chances of securing the White House, something the markets have responded very positively to.”
But Fawad Razaqzada, market analyst at Forex.com, warned that it was a “risky assumption” to believe that Clinton will win just because she is in the clear with the FBI.
“The opinion polls are still very tight and a lot of people will have made up their minds already, regardless of the FBI probe. So a win for Donald Trump is still a big risk which may be underpriced,” he said.
Also illustrating fears for global trade in the event of a Trump victory, Sweden’s krona fell yesterday, reflecting the vulnerability of the Scandinavian country’s open economy to trade restrictions, dealers said. The krona dropped to a six-year low against the euro, hitting 0.10 per krona. – AFP
A businessman walks past an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange in front of a securities company in Tokyo yesterday.