Asia markets bounce back after Trump win

Asian share markets have surged back after Wednesday’s sharp sell-off in the immediate aftermath of Donald Trump’s US election victory.

Thursday’s rally followed rises in Europe and the US, as the market meltdown many had anticipated failed to materialise.

Japan’s Nikkei 225 index soared 6.7%, more than recovering losses from the previous session.

Hong Kong’s Hang Seng index added 2.1% with Australia’s ASX index up 3.3%.

Traders had expected Hillary Clinton to beat Mr Trump to become the next US president. His victory initially sent money flowing into safe haven stocks, gold and currencies including the yen.

But despite the Asia market slide on Wednesday, the major US markets all rallied robustly during the day and closed more than 1% higher.

“Investors were risk averse yesterday, then after seeing that Americans were optimistic and chasing the market higher, they wasted no time reversing their positions,” said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.

“Some of the investors must be thinking that they shouldn’t have sold after all.”

Calming jitters

On Wall Street, the Dow Jones ended the day up by 1.4% at 18,589.69. The S&P 500 was 1.11% higher at 2,163.26 and the Nasdaq was also up by 1.11% at 5,251.07.

In London the FTSE 100 index dropped 2% at the start of trading before recovering to end the day 1% up.

France’s Cac index and Germany’s Dax both closed about 1.5% higher after erasing losses of more than 2%.

The US dollar also rose throughout the day and continued to make gains in Asia on Thursday.

Kathleen Brooks, an analyst at City Index, suggested Mr Trump’s acceptance speech, in which he called for the country to unite, had helped to settle some of the market jitters.

And Nariman Behravesh, chief economist at IHS Markit said that “after the initial shock, investors seem to feel that a Trump administration could be good news for US businesses, with lower taxes and a reduced regulatory burden”.

He added that while Mr Trump had set out several broad economic policies, including corporate tax breaks and the renegotiating or scrapping of trade deals, there was no certainty these would go ahead.

“As in the past, it is unclear how much of the campaign bluster will translate into actual policy initiatives,” Mr Behravesh said.

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