Global markets were rocked on Wednesday by Donald Trump’s victory in the US election but recovered from their worst falls as the president-elect made conciliatory remarks in his victory speech and Wall Street opened higher.

As the scale of Trump’s success became clear, Asian stocks fell sharply, the dollar weakened and gold prices rallied as investors raced for cover amid anxiety about his economic policies.

The rout in Asia looked likely to continue in Europe, but despite large initial declines, the slide was less than feared.

The FTSE 100 index slumped 147 points as London markets opened – a fall that was projected to be considerably bigger at more than 230 points until Trump took to the stage in New York .

Trump’s remarks – more conciliatory than his campaigning talk – helped take the sting out of some of the most violent moves by the time London markets opened. “It’s because he sounded more presidential, there was no mention of ‘lock her up” or ‘build a wall’,” said Jeremy Cook, chief economist at money brokers World First. “It was all, dare I say it, presidential.”

His comments also helped pull back projections for the scale of the fall in the Dow Jones industrial average which at one point looked set to plunge more than 800 points. This would have been an even bigger fall than it suffered in the aftermath of the Brexit vote, which wrong-footed investors in June.

In the event the Dow went through a volatile opening, switching between rises and falls as investors tried to come to terms with events. It is currently up 55 points or 0.3%.

The better than expected US open helped lift the FTSE 100, which is up 51 points or 0.77%.

In Germany, the Dax is up 0.07% and France’s Cac is 0.16% higher , after their earlier sharp falls.

Precious metal miners were among the risers as investors bought gold and silver, while pharmaceutical stocks moved higher as the threat of Hillary Clinton’s price controls disappeared.

Connor Campbell, financial analyst at Spreadex, said: “A surprisingly ‘presidential’ Trump victory speech – setting the bar incredibly low for what is expected from a recently elected candidate – seems to have reassured investors, the talk of infrastructure spending and a lack of usual vulgarity allowing for a relative aura of calm to encroach on the market.

“Of course, just as Britain hasn’t yet Brexited, America hasn’t officially entered the era of Trump, suggesting that much of the trading that greeted the open was a gut-reaction rather than informed positioning, especially considering how thin on the ground the Republican’s actual policies are. That does, however, leave plenty of room for volatility as 2016 begins to wrap up.”

Earlier, Japan’s stock market index had tumbled 919 points and the dollar fell 3% against the yen as investors digested the implications of Trump’s presidency, which stunned investors who had been banking on Hillary Clinton winning the race for the White House.



Jeremy Cook, chief economist at money brokers World First, said the prospect of a Trump presidency was more far reaching than the UK’s vote to leave the EU.

“The great unknown is the economic policy, based around a trade war with Mexico, it’s third largest trading partner, and China, its biggest trading partner. Brexit was about UK instability. Trump is about global instability,” said Cook.

Markets had started pricing in a Trump victory around 3am in London time. On the dealing floor of World First, Cook had been watching the results come in throughout the early hours in London. The Mexican peso was pummelled against the dollar, which fell more than 3% against the Japanese yen. Gold rose more than $40 an ounce.

The peso suffered its biggest decline in more than two decades on fears that Trump will embark on protectionist measures that would damage its relationship with America’s third largest trading partner.



It tumbled as much as 13%, a huge move for a currency, crashing through 20 pesos per dollar. Mexico has reacted with horror at the prospect of a Trump victory: during the campaign the property tycoon pledged to renegotiate the North American Free Trade Agreement with Mexico and Canada – a move that many believe would wreak havoc in economies, such as Mexico’s, that are heavily dependent on exports.

“This is very much a step into the unknown because we simply can’t know what type of President Trump will be,” said analysts at Capital Economics. “Will he be the demagogue from the campaign trail, who threatened to lock up his political opponents, punish the media, build border walls and start a global trade war? Or is he capable of becoming a statesmanlike figure who leads in a more measured manner?”

While the votes were counted the dollar had been weaker against major currencies – the Japanese yen, euro and even the pound, which has been pummelled since the vote for Brexit.

“The US dollar has weakened against a range of currencies, and we’re witnessing a flight to safety. The Japanese yen and Swiss franc have firmed across the board, and the euro is up against the pound – a sign that since Brexit, sterling is no longer viewed as a safe haven,” said Alex Edwards, currency analyst at UK Forex.

Sterling – which sunk to 30-year lows in the wake of the Brexit vote – is currently at $1.2442, up 0.5%, having been as high as $1.2547 earlier.

The yield on 10-year US Treasury bonds was down to 1.74% – which indicates the price the US government will pay to borrow – and analysts at Capital Economics said it could slump to slump to 1.5% within the next few days.



The dollar had been weakening on uncertainty about Trump’s economic policy – he is expected to embark on trade wars – and expectations that the US Federal Reserve will be less likely to raise interest rates.

Until now the markets had expected a rate rise in December but Kathleen Brooks, research director of City Index, said: “Market expectations for a rate hike from the Federal Reserve have tumbled to 50%; earlier on Tuesday expectations were more than 80%. The Fed is unlikely to hike interest rates if we see a sharp and prolonged decline in the stock markets, on the back of a surprise Trump win.”