Markets and dollar plunge as Trump captures White House
SHARE markets plunged yesterday and the dollar tumbled against the yen and the euro as Donald Trump was elected US president, in a stunning upset with major implications for the world economy.
The Mexican peso also fell to a record low as safe-haven assets soared, with gold rising more than 5 percent and German government bonds rallying. Fears about the impact on financial markets led Japanese and South Korean authorities to call crisis talks.
Initial confidence that market favourite Hillary Clinton would win vanished as the firebrand tycoon picked up the major scalps needed to take the White House.
Markets plunged into turmoil as Ms Clinton was considered by many investors to be a safer bet than Mr Trump, who is seen as a loose cannon with policies many fear could wreck the world’s number-one economy.
“It’s been a bloodbath in the markets over the last few hours with the Mexican peso suffering particularly,” said Craig Erlam, senior market analyst at OANDA.
Tokyo had collapsed 5.4 percent by the end of trade, while Hong fell 2.2pc and Shanghai sank 0.6pc.
Sydney gave up almost 2pc, Seoul shed 2.3pc and Singapore dived 1.8pc. Wellington plunged 3.3pc while Taipei was 3pc off. Manila skidded 2.5pc and Jakarta 2pc.
The Sensex on the Bombay Stock Exchange was 3pc off, having initially plummeted more than 6pc on Mr Trump’s performance and news that high-denomination notes were being pulled from circulation as part of a crackdown on tax evasion.
Futures on the S&P 500 and Nasdaq on Wall Street dived more than 5pc at one point while those on the Dow were off 4pc.
Moscow stocks however bucked the trend amid hope that Mr Trump would mend relations with Moscow.
The Mexican peso – which was battered by Mr Trump’s anti-immigrant rhetoric earlier in the campaign – hit a record low against the dollar.
The greenback soared to 20.7128 pesos, around its highest-ever point and about 12pc up on earlier levels, before paring back slightly.
Mr Trump’s anti-Mexican promises have included a pledge to remove undocumented immigrants, build a border wall and tear up a trade deal.
Mexico’s Finance Minister Jose Antonio Meade and central bank chief Agustin Carstens will address the media later in the day to outline actions after the peso’s losses.
The dollar tumbled against the yen as investors rushed into the Japanese unit, which is considered a safe bet in times of uncertainty. The greenback sank to 101.30 yen before edging back up to 103.00 yen.
The sharp moves led Japan’s central bank and government to hold emergency talks as a stronger yen hammers the country’s crucial exporters.
Seoul’s financial regulatory body also held an emergency meeting with executives at major local banks to monitor the impact of the result. The South Korean won was down 1.3pc.
The euro also rose 2.1pc against the dollar, while gold soared 5.4pc at one point – its biggest rally since Britain’s June vote to leave the EU, which also jolted markets.
High-yielding currencies in Asia-Pacific were battered against the dollar, with Australia’s dollar 0.9pc off, Indonesia’s rupiah down 0.8pc and the Malaysian ringgit 0.4pc lower.
Oil prices plunged, with both main contracts more than 2pc down.