Global markets battered by Trump shock

GLOBAL markets went into meltdown and the Mexican peso plunged to record lows as Donald Trump firmed up.

GLOBAL markets went into meltdown, investors fled to safe-haven assets and the Mexican peso plunged to record lows as Donald Trump firmed as the next president of the United States on Wednesday.

Markets were betting on a win for Hillary Clinton, who was widely seen as the “business as usual” candidate. Trump’s win has sparked fears of a new era of protectionist policies.

See our live results coverage and the main election blog here for more, but here is how the day unfolded in the world of finance. All times are in Australian Eastern Daylight Time (AEDT).

• 4:18pm

ASX escapes total bloodbath

The Australian stock market has stemmed some of the bleeding at the end of a volatile session. The benchmark S&P ASX/200 index closed 1.9 per cent lower, having been as high as 1 per cent up and down as low as 3.9 per cent.

At 4:15pm on Tuesday, the S&P ASX/200 index was down 101.2 points at 5,156.6 points, and the All Ordinaries was down 103.9 points, or 1.94 per cent, at 5,238.3 points. The December share price index futures contract was down 103 points at 5,142 points, with 78,489 contracts traded.

— AAP

• 4:05pm

US stocks tumble on election result

US stock index futures have tumbled. Financial markets reacted violently to the results, with S&P futures down more than four per cent and Dow Industrials futures falling more than 700 points.

“Nobody had hedged for a Trump win so people are trying to get out as quickly as possible now,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “A lot of people are making big assumptions now based on the early returns. In my mind its preliminary.” CBOE Volatility index futures shot nearly 40 per cent higher, reflecting investors’ reservations over a Trump presidency.

The Mexican peso slumped versus the US dollar to a historic low above 20 per dollar. The peso was last down more than 10 per cent against the greenback. “Big surprise, clearly going into the evening the polls were within the margin of error in most cases, but at the same time the general expectation was not that Trump would be victorious,” said David Joy, chief market strategist at Ameriprise Financial in Boston.

“There are still votes to count, but the way the night is unfolding is a surprise so far, and you are seeing that reflected in these asset prices.”

— Reuters

• 3:56pm

Stocks sink as Trump presidency looms

The US dollar sank and stocks have plummeted as mayhem came to world markets on Wednesday as investors faced the possibility of a shock win by Republican Donald Trump that could up-end the global political order.

Every new TV network projection in the US presidential election showed the race to be far closer than anyone had thought, sending investors stampeding to safe haven assets.

Sovereign bonds and gold surged while the Mexican peso went into near free-fall as stations gave North Carolina to Trump.

“Markets are reacting as though the four horsemen of the apocalypse just rode out of Trump Tower,” said Sean Callow, a forex strategist at Westpac in Sydney. “Or at least three of them — it might be four when the prospect of a clean sweep of Congress sinks in.”

— AAP

• 3:39pm

Bonds skyrocket on US election surprise

Australian bonds are rallying sharply amid the flight to safe haven investments.

Commonwealth Bank head of debt research Adam Donaldson said between noon and 3:00pm local 10-year bond futures contracts had leapt more than 17 basis points — the biggest rally since the Brexit vote in June.

“That clearly reflects a very broad risk-off tone that we’re seeing across markets, so equities down and the Australian dollar down, the US dollar down and so on,” Mr Donaldson told AAP.

“That reflects that there is now a significant amount of uncertainty about what the outlook for US policy and the US economy is, and concern there will be ongoing adverse reaction from markets.”

At 3:00pm on Wednesday, the December 2016 10-year bond futures contract was trading at 97.790 (implying a yield of 2.210 per cent), up sharply from 97.620 (2.380pct) on Tuesday.

— AAP

• 3:26pm

Donald Trump the next Black Caviar?

Bookmaker TAB now says the election “looks as good as won”, according to live betting trends which see Donald Trump priced at “Black Caviar-like” odds of $1.06.

The Republican was sitting as long as $7.00 at midday, but wins in Ohio and Florida shifted the market dramatically. TAB says he swung to favourite after early votes in Ohio, bringing him to $1.80 versus $2.00 for Hillary Clinton.

“It’s been a very volatile live betting market,” said TAB spokesman Shaun Anderson.

“Clinton looked home early but all that started to change when Ohio and Florida looked like real chances for him. As soon as he was declared in Ohio he became favourite and hasn’t looked back. To put it into perspective, when Black Caviar was racing she was about the same price as Trump is now.”

Sportsbet, meanwhile, has blown Clinton out to $10 from $1.10 at noon, with Trump now at $1.03. “It looks as though the American population have spoken and they’ve said, ‘Hillary, you’re fired!’,” said Sportsbet spokesman Ben Bulmer.

• 3:22pm

Fear, economy top concerns for voters

The economy ranked as the most important issue for the majority of voters, following by terrorism, foreign policy and immigration, according to exit polls cited by The Wall Street Journal.

The majority also rated someone who “can bring needed change” as the quality that mattered most in picking their candidate. The WSJ noted “fear leads optimism” in exit polls.

Interestingly, 58 per cent of voters said they would be scared or concerned about a Trump presidency, compared with 53 per cent cent for Clinton.

• 3:00pm

Safe haven assets shine as Trump weighs

Anxious investors have flocked to safe haven assets. “If an investor was looking to hold any positions in financial markets at this point, it would be in US treasuries, gold and Japanese yen,” IG’s chief market strategist Chris Weston said.

Ten-year US Treasury notes had risen as much as 10 basis points — one of the biggest moves in recent months — driving down yields, traders said. The Japanese yen was also sharply stronger against most currencies.

At 2:28pm, the Australian dollar was down more than five per cent to 77.37 yen, compared to 81.44 yen on Wednesday morning. Spot gold prices rose 3.4 per cent to $US1319.35 an ounce.

— AAP

• 2:42pm

Sell-off looking bigger than Brexit

The Australian share market and Aussie dollar are falling sharply as Donald Trump’s chances of winning the US presidential election firm.

The benchmark S&P/ASX 200 index was down 3.5 per cent at 2:32pm, after trading in positive territory all morning on expectations Hillary Clinton would win the tightly contested race to the White House.

If the selling is maintained, the market will take a bigger hit than the 3.2 per cent plunge recorded in June when the UK voted to leave the European Union.

The Australian dollar hit a six month high of 77.72 US cents at around midday on Wednesday, but dropped an hour later and was at 76.23 US cents at 2:32pm.

Patersons Securities economist Tony Farnham said the local market was taking significant hits as voting results from various US states trickle in. “At this stage, the market is seeing Trump doing a lot better than what a lot of people out there were expecting, and as result the market has been sold off,” he said.

All sectors of the market are being hit by selling, except for gold miners, as the price of the precious metal rises.

Macquarie Group is the one of the biggest fallers, down 3.8 per cent, while insurance giant QBE was down 3.6 per cent. Rio Tinto had fallen 3.3 per cent and BHP was 2.9 per cent weaker. Futures for the US share market are down 450 points on investor fears that Mr Trump has a “chance” of winning, Mr Farnham said.

A win for Mr Trump “could be” Brexit all over again, he said.

— AAP

• 2:34pm

Mexican peso slumps to record low against dollar

The Mexican peso slumped to a record low against the dollar Wednesday as results in the US presidential election pointed to Donald Trump.

The unit, which has become a proxy for the property mogul’s chances of becoming US president, slumped to below 20 against the dollar, a historic low.

— AFP

• 2:20pm

‘Don’t read too much into it’

It might be worth a revisiting AMP Capital chief economist Dr Shane Oliver’s warning from last week. “Around the Brexit vote there was much concern a ‘yes’ vote would be a disaster for shares and the global economy,” he wrote in a client note.

“In the event there was an initial kneejerk sell off but after a few days global markets moved on to focus on other things. So there is a danger in making too much of the US election.”

But Dr Oliver warned Trump’s policies could trigger a “global trade war”.

“Australian shares would be particularly vulnerable to this given our high trade exposure (exports are 21 per cent of GDP in Australia against 13 per cent in the US). While the Fed would be less likely to hike in December if Trump wins the Australian dollar would likely still suffer from the threat to trade and the initial ‘risk-off’ environment.

“A Trump victory to the extent that it leads to falls in investment markets and worries about a global trade war may also increase the chance of another RBA rate cut in Australia.

“Beyond the initial reaction, share markets could then settle down and get a boost to the extent that his stimulatory economic policies look like being supported by Congress, but much would ultimately depend on whether we get Trump the pragmatist (who backs down on his more extreme policies, eg around protectionism) or Trump the populist.

“Congress along with economic and political reality can probably be relied on to take some of the edge of Trump’s policies to some degree, but this would take time.”

• 2:10pm

Markets in free fall as Trump moves into lead

Markets went into free fall Wednesday and the Mexican peso tanked as Donald Trump appeared to be moving into the lead in the race for the White House.

Safe haven assets rallied as investors went running for cover, with the yen and gold rushing higher. Initial confidence that market favourite Hillary Clinton would win the knife-edge race was wiped out as results showed the firebrand tycoon appeared to be heading for victory in the must-win state of Florida.

Clinton is considered by many investors to be a safer bet than Trump, who is seen as a loose cannon with policies many fear could wreck the world’s top economy.

“Put your seat belts on because this is going to be a bumpy ride,” Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey told Bloomberg News.

— AFP

• 2:04pm

Mexican peso dives almost 10 per cent

The peso plunge continues. The currency hit as low as 19.8619 to the US dollar, down almost 10 per cent from its high earlier in the session.

The safe-haven Japanese yen was surging, up to 103.14 yen against the greenback from above 105 yen seen earlier in the day.

Analysts say Mexico’s economy could suffer under a Trump presidency because of his vow to renegotiate a free-trade deal, block migrants’ remittances to their homeland and make the Mexican government pay billions for a massive border wall.

— AFP

• 1:57pm

Shares and dollar drop as Trump win looms

The Australian share market and dollar have taken sharp falls as Donald Trump firms as the likely winner of the US presidential election.

The share market’s benchmark S&P/ASX 200 index was down 1.7 per cent at 1:40pm, after trading in positive territory all morning on expectations Hillary Clinton would win the tightly contested race to the White House.

The Australian dollar hit a six month high of 77.72 US cents at around midday on Wednesday, but dropped an hour later and was at 76.83 US cents at 1:40pm.

• 1:54pm

Mexican peso’s steepest dive in more than 20 years

The Mexican peso has now plunged around 6 per cent as Donald Trump makes a strong showing against Hillary Clinton.

The currency, which has become a proxy for the property mogul’s chances of taking the White House, was at 19.7240 to the US dollar just before 1:45pm.

• 1:44pm

Sportsbet ‘starting to get very nervous’

The bookmaker says Trump has rapidly shortened from $9 at noon to $2.10, with Florida looking like it’s in the bag. Clinton has come out from $1.10 to $1.68.

Almost 25,000 punters have now backed Trump, Sportsbet says, up from 12,000 yesterday, while just over 13,000 are on Clinton.

“Trump has surged back into contention in the past hour with his odds now the shortest they have been this campaign at $2.10,” said Sportsbet spokesman Ben Bulmer.

“We are starting to get pretty nervous here at Sportsbet, with punters set to take more than $10 million from us if Trump manages to win this thing.”

• 1:34pm

‘We are calling it Trump victory’

Naeem Aslam, chief market analyst at ThinkForex, has called it for Trump.

“The electoral vote is clearly showing that Trump is in the lead,” he said.

“Mr Trump got people to vote and this is making the difference. He is closing fast and thick on bombshell states which matter the most (he has Florida in his pocket so far and Ohio is not too far either).

“These results have brought significant moves in the market and the Mexican peso has moved sharply lower, the S&P500 futures are also moving lower and the Dow futures also showing the same message.

“This night is not going to be short one but things are certainly have started to look a lot like Brexit. This reminds us of Sunderland moment as peso and yen were moving in a different direction earlier, but look at them right now and it appears that you are looking at a completely different derivative. We are glued to our screens and paying attention to them very carefully.”

• 1:25pm

Panic grips world markets

Here we go. Markets are starting to seriously freak out as Trump leads the count in key battleground states. In the US, traders are piling into bonds, while the Dow futures index plunged from a positive 100 points to down 450 just before 1:30pm.

The Mexican peso, widely seen as a proxy for Trump’s chances, has also plunged 5 per cent against the US dollar after rising in early voting.

“I would say the market is a bit more cautious as it doesn’t seem to be such a quick and decisive victory for Hillary as it seemed,” Ian Lyngen, head of US rate strategy told CNBC. “But it’s not over yet.”

• 1:07pm

ASX goes negative as Trump firms in Florida

In a wild day of trade, the ASX 200 dipped by 14 points just after 1pm AEDT after spiking as high as 57 points earlier in the day.

The biggest losers so far on the local market are Aristocrat Leisure, down more than 7 per cent, and Mayne Pharma, down 4 per cent. Webjet has posted the biggest gains, up nearly 12 per cent.

• 12:55pm

Hong Kong stocks slip as Clinton loses ground

Hong Kong stocks slipped in early trade Wednesday as early results in the US presidential election saw market-favourite Hillary Clinton lose ground in key states against rival Donald Trump.

The Hang Seng index eased 0.18 per cent, or 41.74 points, to 22,867.73 by the break. And the benchmark Shanghai Composite Index was slightly lower, dipping 1.81 points to 3,146.08, while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, was barely changed, edging up 0.12 points to 2,080.56.

— AFP

• 12:32pm

Markets now feeling ‘very nervous’

As Florida hangs on a knife edge, Donald Trump looks like he could pull it off in the crucial state. That would be bad news for Hillary Clinton — and markets are “very nervous”, according to OANDA senior currency trader Stephen Innes.

“There’s still lots of short term uncertainty,” he said.

“It appears Wall Street got ahead of themselves overnight. As the one-way street, has reversed slightly on the initial results. Mind you very early days but patchy liquidity is certainly magnifying price movements.

“Not a one-way street at all. Aussie looks under the gun with Florida vote favouring Trump. The USD/JPY pair is looking very nervous and a sea of red on the US indices this morning. Early days but starting to feel like Brexit deja vu.”

• 12:18pm

Trump win would push money into Aussie property

LJ Hooker head of research Matthew Tiller has predicted a Trump win would make Australian property look less risky to Chinese real estate buyers, whose top destinations are New York, Los Angeles and San Francisco.

“A Trump victory adds sovereign, or crown risk, to inward investment into the US, affecting the amount of capital, the type of investors and level of return expected,” Mr Tiller said.

“While not good for the US, this is a positive for Australia because it makes investment here more attractive for large foreign developers and institutions as well as high net worth private buyers looking to purchase residential property.

“The short term may see investors hold off investing anywhere until things are more certain, however, at the end of the day this result makes Australia a more attractive, secure and less risky destination for global capital.”

• 12:04pm

Asian markets edge up but volumes ‘eerily low’

Asian equities rose in early business Wednesday as early US presidential election results trickled in, with initial bets going on a win for market-favourite Hillary Clinton.

However, there remains unease with Trump having rallied from a double-digit deficit in some polls to within striking distance of Clinton, while analysts drew parallels with Britain’s shock EU exit vote.

“Volumes are eerily low in the local markets this morning, which means a lot of investors are still sitting on the sidelines waiting for further confirmation of the outcome of the US election,” Gary Huxtable, client adviser at Atlantic Pacific Securities, said in a note.

— AFP

• 11:47am

Australian stocks gain on Clinton hopes

The Australian share market has risen strongly in early trade, taking cues from Wall Street, as investors bet on the likelihood of a Hillary Clinton win the US presidential elections.

The benchmark S&P/ASX 200 index was up 0.7 per cent within the first hour of trade, with mining and financial stocks leading the gains. “Everything that happens today will be determined by the US elections,” Australian Stock Report head of trading Chris Conway said.

“The base case is that Clinton wins and we get more certainty about what happens in the US economy. But if that outcome is in jeopardy, we will see a pretty violent shift in the market.”

• 11:17am

Tokyo shares open higher

Tokyo stocks opened higher on Wednesday as early results from the US presidential election trickled in, with traders largely betting on a win for market favourite Hillary Clinton.

The benchmark Nikkei 225 index rose 0.64 per cent, or 110.57 points, to 1,7281.95 in the first few minutes of trading while the Topix index of all first-section issues was up 0.62 per cent, or 8.43 points, at 1,371.92.

— AFP

• 11:04am

Trump ‘could ruin a great 2017’

Financial commentator and founder of The Switzer Group, Peter Switzer, has warned that a Trump win could ruin his bet that there won’t be a recession next year.

“I think he would have little impact on the big drivers of growth in 2017 but he could easily take the confidence wind out of the sails of the US for six months or more until it’s realised that this real estate salesman won’t want to do too much to hurt the economy,” he writes.

“[But] for at least six months, I’d expect a business and consumer confidence negative effect, if the stock market dives 10 per cent in coming days if Donald becomes president.

“We simply don’t need a Trump experience, with 2017 shaping up as a good year. Let’s hope God can prove that there is a God in heaven via the election results seen over the course of today.”

• 10:16am

Australian stocks open sharply higher

Australian stocks climbed 0.80 per cent at the open Wednesday in anticipation of a victory for Hillary Clinton in the US presidential election. At 10:10am, the S&P/ASX 200 was 42.1 points higher at 5,299.9.

“While the market is looking more confident about a Clinton victory, the lead remains within the realms of historical polling errors, so it is not quite over yet,” said ANZ in a morning note, warning of volatility.

“Regardless of the result today, the increasingly unpredictable nature of elections is sending an important message.

“The global backdrop remains one of rising debt, slow growth, limited reform, a gulf between asset and wage inflation, and rapid technological change (which offers opportunities but also undermines job security).”

— AFP

• 9:48am

Aussie dollar holding above 77 cents

The Australian dollar is trading at 77.63 US cents. ​​“That’s a clear vote by traders that Hillary Clinton is going to win the US presidential election,” said Greg McKenna, chief market strategist at CFD and FX broker AxiTrader.

Mr McKenna said the US S&P 500 had recouped most of its recent losing streak, meaning much of the “expected good news” was already priced into markets.

If Trump wins and surprises the market, “all bets are off”, he said. “Under that scenario I’d expect the Aussie dollar will be at least a cent lower against the US dollar and get absolutely hammered on the euro and yen crosses,” he said.

• 9:40am

Wall Street gains, traders bet on Clinton

US stocks rose for a second straight session as investors bet Democratic candidate Hillary Clinton would win the US presidential election.

Data company VoteCastr, which is providing real-time election information through news outlets, including Slate, showed Clinton on Tuesday with an early lead among voters in Florida, a must-win state for Trump.

Several investors said VoteCastr’s data pushed stock prices higher, although many questioned its accuracy. Clinton has a 90 per cent chance of defeating Trump, according to the final Reuters/Ipsos States of the Nation poll released on Monday.

“The market’s betting that a Clinton victory will lift the cloud of uncertainty we’ve been facing the last two weeks,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

— Reuters

• 9:29am

Aussie punters bet big on US election

Australian bookmakers will be crossing their fingers for a Clinton win today. If Trump wins, Sportsbet will have to pay out nearly $10 million, TAB will pay more than $3.8 million, and William Hill will pay a bit over $700,000.

Sportsbet has close to $7 million wagered so far, William Hill has more than $1.5 million, and TAB has taken $1.6 million. Two TAB punters each bet $100,000 on Trump several weeks ago, one at $5.00 and the other at $4.50. Not to be deterred, one punter put $74,000 on Clinton yesterday.

William Hill currently has Clinton at $1.17 with Trump at $5.50, Sportsbet has Clinton at $1.22 and Trump at $5.00, while TAB also has Clinton at $1.22 and Trump at $4.25.

• 8:58am

‘Clinton by far superior for our economy’

Australian economists have cast their votes.

A poll of 36 leading economists by the Monash Business School and the Economic Society of Australia has found an overwhelming majority backed the Democratic candidate as “superior ... for the Australian economy and for Australia”.

“Trump would be a disaster for the world,” said Max Corden, Emeritus Professor of International Economics at Johns Hopkins University. “Do we want another Hitler? Or Mussolini? No, No. Hillary is okay.”

QUT Business School Professor Uwe Dulleck said Trump would have a strong impact on the world, and most importantly for Australia, on the Chinese economy.

“Given the role trade has for Australia, this has to have direct effects on the Australian economy,” he said. “In the long term one may argue that a Trump presidency may bring us to the end on the American hegemony, with China likely to taking the lead next.

“In the long term, this may be beneficial for the Australian economy (but there is a lot of uncertainty with regards to China’s rise and what would be the impact of China’s rise).”

Professor John Freebairn, Ritchie Chair in Economics at the University of Melbourne, said Trump’s antitrade and immigration views would “put a brake on international trade”.

“His incoherent budget strategy is likely to become an adverse global economic shock,” he said.

“On the other hand, the very-much more of the same Clinton economic strategy if followed seems unlikely to overcome the many economic challenges facing the US and world economies, with adverse flow on-effects to the Australian economy.”

Among those who disagreed were University of Queensland Economics Professor Paul Frijters. “Much as Trump-bashing is all the rage at the moment, I just don’t think the outcome of the US elections matters that much to Australia or its economy,” he said.

“Both candidates will be our ally if elected. What is happening in China is far more important to us on all counts (trade, tourists, students, capital flight). I can’t see much effect of either Trump or Clinton on US-Australia trade.

“So the difference would have to come from far-fetched scenarios, such as the likelihood of costly wars begun by the winner, and I on balance don’t think Trump is more likely than Clinton to drag us into costly wars that we should not be in.”

• 7:10am

Mexican peso rises as US votes

Mexico’s peso rose Tuesday as traders appeared to bet on Hillary Clinton winning the US election against Donald Trump, who has vowed to up-end economic ties between the neighbouring countries.

The peso fell as Americans began going to the polls, but later rose to close at 18.75 per dollar, up 0.53 per cent from 18.85 to the dollar on Monday, according to the private bank Banamex.

The Mexican stock market, meanwhile, opened 0.2 per cent higher. The national currency has had a rollercoaster ride during the US presidential campaign, falling when Trump, the Republican candidate, was up in opinion polls and rising when his Democratic rival Clinton fared better.

The peso tumbled to 19.50 per dollar last week when a poll put the real estate billionaire ahead of Clinton.

But the Mexican currency and stock market surged Monday, a day after the FBI confirmed Clinton would not be prosecuted for using a private email server for government communications when she was secretary of state.

Analysts say Mexico’s economy could suffer under a Trump presidency because of his vow to renegotiate a free-trade deal, block migrants’ remittances to their homeland and make the Mexican government pay billions for a massive border wall.

— AFP

• 6:56am

Australian market set to open higher

The Australian market looks set to open higher as Wall Street lift with investors betting Democrat candidate Hillary Clinton will win the US presidential election.

At 6:45am on Wednesday, the share price index was up 19 points at 5,264. Early voter turnout estimates are favouring Clinton to win the race for the White House.

Wall Street sees the former secretary of state as lending greater clarity and stability to the markets, while Republican candidate Donald Trump’s stance on foreign policy, trade and immigration is less certain.

The local market will be watching for signs of who might win the US presidential election, but the results will not be known until late in the day, at the earliest.

In Australia, the market on Tuesday closed slightly higher but investors are treading cautiously for fear of a Brexit-like surprise from the US presidential election. The benchmark S&P/ASX200 index rose seven points, or 0.13 per cent, to 5,257.8 points. The broader All Ordinaries index was up 11.3 points, or 0.21 per cent, at 5,342.2 points.

— AAP

• 6:48am

Dollar surges against greenback ahead of poll

The Australian dollar has surged against its US counterpart to be just under 77.5 US cents ahead of the presidential race between Democrats Hillary Clinton and Republican candidate Donald Trump.

At 6:35am on Wednesday, the local unit was trading at 77.48 US cents, up from 77.04 cents on Tuesday. The local currency has also jumped against the yen and the euro.

— AAP