Mar­kets re­ac­tion to US elec­tion

Malta Independent - - FINANCIAL -

While the bear­ish sen­ti­ment that en­gulfed Euro­pean eq­ui­ties in re­cent weeks is be­ing vin­di­cated, health-care stocks are eas­ing the pain. On Wed­nes­day, the re­gion’s largest in­dus­try group headed for its big­gest jump in two months, tem­per­ing losses for eq­uity bench­marks af­ter Don­ald Trump won the race to gov­ern the re­gion’s big­gest ex­port mar­ket.

Still, risk aver­sion was ev­i­dent among most other in­dus­try groups. The Stoxx Europe 600 In­dex lost 0.5 per­cent at 10:36 a.m. in Lon­don, trim­ming an ear­lier drop of as much as 2.4 per­cent, with au­tomak­ers lead­ing de­clines.

Across Europe, Ger­many’s DAX In­dex lost 0.9 per­cent, led by Daim­ler. In France the CAC 40 In­dex fell 1.2 per­cent, led by Re­nault SA, while the U.K.’s FTSE 100 In­dex slid 0.2 per­cent, dragged by J Sains­bury Plc. Spain, Por­tu­gal and Italy posted the big­gest losses in Europe.

Euro­pean com­pa­nies get about 17 per­cent of their to­tal rev­enue from North Amer­ica, with those in Bel­gium, Ire­land and Switzer­land among the most ex­posed, Mor­gan Stan­ley es­ti­mated in May. Europe is also the only re­gion in the world that gets the ma­jor­ity of its sales from over­seas, mak­ing it par­tic­u­larly vul­ner­a­ble to global eco­nomic and po­lit­i­cal risks and to cur­rency fluc­tu­a­tions. While the euro was lit­tle changed, it ear­lier rose as much as 2.5 per­cent against the dol­lar. A stronger euro makes Euro­pean prod­ucts less com­pet­i­tive abroad.

Asian stocks have fallen as Don­ald Trump looked in­creas­ingly likely to be­come new US pres­i­dent. All re­gional mar­kets are lower, with money flow­ing into safe haven stocks, gold and cur­ren­cies in­clud­ing the yen. Ja­pan’s Nikkei 225 closed down by 5.4%. Traders had ex­pected a com­fort­able Hil­lary Clin­ton win.

US stock fu­tures fell sharply with the Dow Jones in­dex ex­pected to lose more than 4% - 800 points when it re­opens

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