Stock market nears record high after election

A screen showing world stock market index at Hong Kong Stock Exchange. Pic AP

Major U.S. stock indexes moved higher in morning trading Wednesday as Wall Street sized up the implications of Republican Donald Trump's stunning presidential election victory.

Bill Wood, a certified financial planner and a partner at The Advisory Group in Centerville, attributed the market volatility to uncertainty surrounding Trump, who has promised to shake up the status quo, while Democrat nominee Hillary Clinton was viewed as a continuation of current government and administrative policies.

Markets had been jittery in recent weeks over the prospect of a Trump administration. Stock futures fell and bonds rallied as markets feared Donald Trump could pull off an upset and take the White House.

Health care stocks bucked the downward trend and were broadly higher, led by drugmakers.

"Hillary Clinton had been very vocal in her opposition to drug price gouging".

The blue-chip Dow Jones Industrial Average jumped more than 200 points, or about 1 percent, just before noon despite earlier turmoil in futures markets that had suggested it would suffer a 700-point plunge.

Health care stocks were also heading sharply higher. Utilities were down the most, sliding 3.4 percent, followed closely by consumer-focused stocks.

But stocks quickly recovered the day after the election, according to The New York Times: "Futures for the Standard & Poor's 500-stock index initially plunged 5 percent but recouped almost all their losses when stocks started trading in the United States". The Nasdaq composite index fell 30 points, or 0.6 percent, to 5,162.

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New York Mayor Rudy Giuliani Tuesday: "While I would have supported an investigation, Trump had to make a "tough choice". And although he won OH handily, Trump won other major states, including the two mentioned above, by close margins.

The 30-year Treasury bond yield gained nearly 25 basis points in its sharpest rise in more than five years; yields on the 10-year note climbed 21 basis points to breach the 2 percent mark for the first time since January. Crude oil prices also headed lower.

Gold miner Randgold Resources rose 5% or 340p to 7,115p, while Antofagasta climbed 52.5p to 641.5p.

However, the muted reaction on Wall Street to Trump's victory resulted in shares in Europe paring back big losses run up earlier in the trading day.

The Dow had dropped 0.35 per cent in the first five minutes of Wednesday trading before gradually building to a peak of plus-1.7 per cent before trailing off in the last 45 minutes of the session.

Trump's conciliatory tone boosted market expectations that the Federal Reserve will raise USA interest rates in December and supported dollar strength. While the victor has yet to be determined, Trump appeared to be on the verge of a stunning victory.

A sea of red swept across Asian markets on Wednesday as nervous investors flocked to safe-haven assets amid uncertainties over Mr Trump's shock victory. In currency markets, the dollar rose to 104.56 yen from 105.05 yen, while the euro weakened to $1.0961 from $1.1016.

One currency that remained heavily sold is the Mexican peso.

At one point, the futures for the Dow was down over 4%, but when it came time for Trump to talk after being declared the victor the financial markets had already steadied. Trump has insisted that Mexico will pay for the wall.