Mar­kets and dol­lar plunge as Trump cap­tures White House

The Myanmar Times - - International Business -

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.

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