World Economy

Trump Win Shakes World Markets

“Donald Trump as president is terrifying,” shocked Americans reacted as the Republican won the election race
Trump Win Shakes World Markets
Trump Win Shakes World Markets

Same story. Different country. Much, much bigger implications. That’s the economic message from Donald Trump’s victory in the year of shocks. By comparison, Brexit was a sideshow.

Trump shattered expectations with an election victory that revealed deep anti-establishment anger among American voters and set the world on a journey into the political unknown, news outlets reported.

UK and European markets are taking stock after sharp initial falls following his victory.

The FTSE 100 index fell 2% at the start of trading before paring back some losses to trade 0.7% lower at midday.

Other major European stock markets also fell, with money flowing into safe haven stocks, gold and currencies including the yen.

Traders had expected Hillary Clinton to beat Trump to become the next US president.

France’s Cac index and Germany’s Dax are each down about 1.5% after heavier falls at the start of trading.

Some analysts have likened the shock of a Trump victory to the Brexit result earlier this year.

However, neither markets nor currencies have swung as wildly as they did after June’s EU referendum.

US stock futures fell dramatically overnight as Trump’s lead became clear, although the Dow Jones index is now expected to lose 2%—about 400 points when it reopens—compared to earlier predictions of a 4% fall.

Asian markets were described as a “sea of red” at one point, before seeing their losses narrow towards the end of Wednesday trading.

Japan’s Nikkei 225 finished 5.4% lower, but the Hang Seng in Hong Kong and the Shanghai Composite—which closed later—lost 2.2% and 0.6% respectively.

Overnight, the FTSE 100 futures contract indicated the British market would slump—down 4%, was the call.

In the end, the indicators were wrong. It was a far cry from the sharp fall the day after the Brexit vote, and mild after the heavy sell-off on Asian markets overnight.

  World Reaction

Leaders and officials across the world reacted with shock, hope and congratulations.

“I pledge to every citizen of our land that I will be president for all Americans,” Trump said in his victory speech.

“Donald Trump as president is terrifying”, shocked Americans reacted as the Republican won the election race.

In a joint letter, Donald Tusk, president of the European Council and Jean-Claude Juncker, president of the European Commission, congratulated Trump and urged him to come to Europe for talks “at your earliest convenience”.

The EU’s foreign affairs chief, Federica Mogherini, gave a diplomatic reaction to Trump’s victory, tweeting: “EU-US ties are deeper than any change in politics.”

Martin Schulz, the president of the European Parliament, said the vote was “a protest vote” similar to Brexit. “It began timidly, but this is like a wave, a wave of protest that will lead to Trump in the White House,” Schulz told Europe 1 radio.

UK Prime Minister Theresa May congratulated Trump saying Britain and the US have “an enduring and special relationship based on the values of freedom, democracy and enterprise”.

Scotland’s First Minister Nicola Sturgeon urged Trump to prove that he can act for all US citizens regardless of their heritage.

French President Francois Hollande said Trump’s win “opens up a period of uncertainty”.

German Chancellor Angela Merkel said: There’s no country we Germans have as close a relationship with as the United States of America. Whoever rules this vast country, with its enormous economic strength, its military potential, its cultural influence, carries a responsibility which is felt all over the world.

In Italy, Pope Francis did not mention the US elections during his Wednesday audience, but secretary of state, Cardinal Pietro Parolin, offered Trump congratulations in a statement to Vatican Radio.

Speaking in the Kremlin, Russian President Vladimir Putin congratulated Trump on his victory and said Russia was ready to work for better ties.

Slovenia, Spain, Sweden, Egypt, Palestine, Saudi Arabia, Turkey, Iraq, Mexico, Cambodia, China, Indonesia, Malaysia, Japan and several other countries conveyed their congratulations to Trump.

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