Asia markets extend global rally on Trump hopes
AFP
AFP, HONG KONG: Asian equities rallied yesterday, joining a goldrush across world markets as the initial shock of Donald Trumps election win was replaced by hopes his plan to kickstart the US economy will succeed.
Trading screens were 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, upending expectations.
However, a reassuring victory speechfollowed by calls from Clinton and President Barack Obama to get behind Trumpprovided some encouragement to traders, sending risk assets rallying.
Most markets in Asia either entirely reversed or clawed back most of the previous days losses, while the dollar pushed higher.
The greenback had come under pressure on worries that uncertainty over Trumps policies would cause the Federal Reserve to hold off an interest rate rise, but analysts said those worries had abated for now.
Tokyo closed up 6.7 percent, with a plunging yen providing support. The dollar dallied with 106 yen before easing slightly, well up from Wednesdays low of 101.20 yen.
Hong Kong gained 1.9 percent and Shanghai closed 1.4 percent up. Sydney closed 3.3 percent higher, Seoul jumped two percent and Taipei put on 2.4 percent.
There were also gains of more than one percent in Wellington, Singapore and Manila. The pharma and financial sectors were among the biggest winners regionally on hopes Trump will move to loosen US regulations affecting their industries.
In early European trade London and Paris each rose 0.7 percent, while Frankfurt was 0.6 percent higher.
CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Trumps 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 focused 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.
And Grant Williamson, an investment adviser at brokerage Hamilton Hindin Greene in New Zealand told Bloomberg News: Hell certainly be friendly to American business and that could very well stimulate their economy.
