Hong Kong (AFP) – Wall Street hit a record high on Thursday as most world markets extended gains on hopes Donald Trump’s plan to kickstart the US economy will succeed.
Tokyo surged nearly seven percent as Asian markets caught up with a post-election rally elsewhere and European bourses mostly built on Wednesday’s upturn except for London, a touch lower after running into profit-taking.
“Financial markets have swiftly reassessed Trump’s win, embracing it with bullish gusto,” said Mike van Dulken, head of research at Accendo Markets.
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.
– ‘Good for growth’ –
“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.
World stock markets have recovered from a sharp initial downturn to Trump’s win, with Europe’s leading indices gaining up to 1.6 percent on Wednesday.
In Paris, Vivendi shares were up more than eight percent after the French media conglomerate returned to profit in the third quarter.
But Renault shares reversed 2.5 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 conciliatory words from Clinton and President Barack Obama — provided some encouragement to traders.
Most markets in Asia on Thursday either entirely reversed or clawed back most of the previous day’s losses.
Elsewhere Thursday, oil prices eased back 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 that hope 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 focussed 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 owing to fears about Trump’s policy plans.
– Key figures around 1445 GMT –
New York – Dow: UP 0.7 percent at 18,727.27
London – FTSE 100: DOWN 0.2 percent at 6,895.37
Frankfurt – DAX 30: UP 0.4 percent at 10,683.28
Paris – CAC 40: UP 0.5 percent at 4,565.95
EURO STOXX 50: UP 0.4 percent at 3,067.76
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 $1.0889 from $1.0914 Wednesday
Pound/dollar: UP at $1.2477 from $1.2424
Dollar/yen: UP at 106.56 yen from 105.72 yen
Dollar/Mexican peso: UP at 20.57 pesos from 19.82 pesos
Oil – West Texas Intermediate: DOWN 70 cents at $44.57 per barrel
Oil – Brent North Sea: DOWN 54 cents at $45.82
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