Wednesday, November 9, 2016
The rising prospect of a Donald Trump presidency shook financial markets around the world today, sending Dow futures and Asian stock prices sharply lower as investors panicked over uncertainties on trade, immigration and geopolitical tensions.
Dow futures plunged more than 4 percent, and Japan’s major index nosedived 6.1 percent, its largest drop in years. The Mexican peso likewise tumbled and investors looking for safe assets bid up the price of gold.
“Rightly or wrongly, markets are going to be concerned about a Trump victory, particularly given the potential consequences for world trade and its impact on many large companies in the U.S. stock market,” said Ric Spooner, chief analyst at CMC Markets in Sydney.
During the campaign, Trump has threatened to greatly restrict immigration to the U.S., renegotiate the North American Free Trade Agreement and reject a Pacific Rim trade initiative known as the “TPP.” He also has vowed to build a wall along the United States’ southern border and force Mexico to pay for it.
Economists have said a Trump win could put the Mexican economy into contraction, and as results emerged today, the Mexican peso swooned 11.5 percent to 20.73 pesos to the dollar.
Shares had been higher early in Asia’s trading session today but then turned sharply when Trump first gained the lead in the electoral vote count.
Pricing in a possible Trump victory, Dow futures were down 4.3 percent or 791 points at 17,496.00, and S&P futures had dropped 5.0 percent to 2,028.60.
Shares tumbled across Asia. Japan’s Nikkei 225 index plunged 6 percent to 16,153.40, and Hong Kong’s Hang Seng slumped 3.6 percent to 22,086.73. South Korea’s Kospi shed 3.4 percent to 1,935.98, the Shanghai Composite index fell 1.3 percent to 3,106.23 and Australia’s S&P ASX/200 sank 1.9 percent to 5,156.60.