Hong Kong (AFP) – World stock markets rallied further Thursday, with Tokyo surging almost seven percent, on hopes Donald Trump’s plan to kickstart the US economy will succeed following his shock presidential election victory.
The dollar firmed after sliding Wednesday on worries that uncertainty over Trump’s policies would cause the Federal Reserve to hold off an interest rate rise.
Haven currency the yen was a big loser Thursday, slumping to a 3.5-month low at 106.43 yen to the dollar.
“Perception now is that the controversial multi-billionaire TV presenter and property mogul could be good for business; and talk of tax cuts and heavy spending on infrastructure would certainly be good for growth,” said Lee Wild, head of equity strategy at stockbroker Interactive Investor.
Around 1030 GMT, London’s benchmark FTSE 100 index was up 0.9 percent compared with the close on Wednesday. Frankfurt’s DAX 30 also grew 0.9 percent and the Paris CAC 40 won 1.1 percent.
World stock markets have recovered from a sharp initial downturn to Trump’s win, with Europe’s leading indices closing up between 1.0 and 1.6 percent on Wednesday.
Tokyo’s benchmark index closed up a huge 6.7 percent Thursday, with a plunging yen providing support.
Hong Kong gained 1.9 percent and Shanghai closed 1.4 percent higher. Sydney rallied 3.3 percent higher and Seoul jumped 2.0 percent.
In Paris, Vivendi shares rose more than ten percent after the French media conglomerate returned to profit in the third quarter.
But Renault shares reversed more than two percent after a government inquiry into emissions cheating entered a new stage.
The French economy ministry said late Wednesday that the country’s anti-fraud unit DGCCRF had submitted its report on diesel emissions by Renault cars to prosecutors, a move that could open the door to criminal proceedings against the car maker.
Asian and European trading screens were initially awash with red Wednesday as the regions’ investors were the first to react to news that the firebrand tycoon had defeated market favourite Hillary Clinton.
However, a reassuring victory speech — followed by calls from Clinton and President Barack Obama to get behind Trump — provided some encouragement to traders.
Wall Street stocks surged Wednesday with pharmaceutical and banking shares especially strong in anticipation of favourable Trump policies.
Most markets in Asia on Thursday either entirely reversed or clawed back most of the previous day’s losses.
Elsewhere Thursday, oil prices diverged as the International Energy Agency said output by OPEC oil producers had reached record levels, raising fears a global crude glut would continue to weigh on markets unless the cartel agrees on a cut.
– ‘Friendly’ –
CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Trump’s extreme rhetoric during the campaign “was a sales pitch rather than a commitment to act”.
“Investors ignored the potential for damage to international trade and growth prospects and focused on Republican control of both houses of Congress as well as the White House,” he said.
“This offers the prospect of reform that could stimulate the US economy.”
The Mexican peso, which hit a record low 20.78 against the dollar on Trump’s win, also strengthened Thursday but remained under pressure at 19.94 owing to fears about Trump’s policy plans.
While on the campaign trail the president-elect often made anti-Mexican promises including a pledge to remove undocumented immigrants, build a border wall and tear up a long-standing trade deal.
– Key figures around 1030 GMT –
London – FTSE 100: UP 0.9 percent at 6,971.50
Frankfurt – DAX 30: UP 0.9 percent at 10,746.38
Paris – CAC 40: UP 1.1 percent at 4,592.99
EURO STOXX 50: UP 1.1 percent at 3,088.28
Tokyo – Nikkei 225: UP 6.7 percent at 17,344.42 (close)
Hong Kong – Hang Seng: UP 1.9 percent at 22,839.11 (close)
Shanghai – Composite: UP 1.4 percent at 3,171.28 (close)
New York – Dow: UP 1.4 percent at 18,589.84 (close)
Euro/dollar: DOWN at $1.0897 from $1.0914 Wednesday
Pound/dollar: DOWN at $1.2383 from $1.2424
Dollar/yen: UP at 106.41 yen from 105.72 yen
Dollar/Mexican peso: DOWN at 19.77 pesos from 19.82 pesos
Oil – West Texas Intermediate: DOWN 12 cents at $45.15 per barrel
Oil – Brent North Sea: UP 32 cents at $46.68
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