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Japan leads the way as Asian shares soar on Trump bounce – live Stock markets rally as Trump bounce continues – live updates
(35 minutes later)
8.16am GMT
08:16
Coper-producer Antofagasta is the top riser in London, with fellow miners Glencore and Anglo American close behind.
Traders are betting that Trump’s programme of cutting taxes, a new debt-funded infrastructure programme, would push up inflation and raise demand for commodities.
8.09am GMT
08:09
FTSE 100 jumps in early trading
European markets are open, and shares are rising, as predictions of a Trump slump are trampled in an early wave of buying.
The FTSE 100 index has jumped by 49 points, or 0.7%, to 6960 in early trading. Mining stocks and financial companies are leading the way.
The French CAC, German DAX, Spanish IBEX and Italian FTSE MIB have also gained around 0.7% to 0.9%.
Updated
at 8.10am GMT
7.56am GMT
07:56
What happened to the crash?
The City analysts who predicted markets would slump if Trump pulled off a shock win have some explaining to do today.
The consensus view was that Trump’s sheer unpredictability, opposition to free trade, bombastic and often-shocking comments - plus the vague and uncosted nature of his proposals - would scare investors out of town. But instead, we got a knee-jerk selloff yesterday, followed very swiftly by a bounceback (which Asia just caught up with.)
It’s a lesson to all of us about how markets react, as Kit Juckes of Societe Generale explains:
Buy the rumour, sell the news or in this case, sell the rumour and buy the news. We were all told this when we first arrived in dealing rooms and it is used to explain why academics and non-market participants are so often confused by the reaction of markets to events.
I’m not sure I can remember a better example of this maxim than the last week’s market reaction to changing speculation about the outcome of the US Presidential election, and then to what happened. The result is plenty of egg on the face of all sorts of people. Mine included.
So instead, investors quickly began reassessing the implications of a Trump presidency, and a Republican-controlled Congress.
Kit says:
It is widely expected that President Trump will be able to enact tax cuts, particularly for corporations, that will be positive for growth and will boost inflation.
It may not be that simple for Trump to get things done -- the Tea Party wing won’t like the thought of a debt-fuelled stimulus plan, for starters.
7.34am GMT7.34am GMT
07:3407:34
Good morning from London, where bleary-eyed traders have returned to their desks.Good morning from London, where bleary-eyed traders have returned to their desks.
We’re not expecting a repeat of the huge rally seen in Asia overnight - London had its Trump rally yesterday afternoon.We’re not expecting a repeat of the huge rally seen in Asia overnight - London had its Trump rally yesterday afternoon.
But the markets are still expected to rise, as the City continues to defy expectations and take yesterday’s shock election result in its stride.But the markets are still expected to rise, as the City continues to defy expectations and take yesterday’s shock election result in its stride.
The European opening calls suggest there might be just a little more juice in the tank - FTSE +22, DAX +21, CAC +9 courtesy of IG at 5.06amThe European opening calls suggest there might be just a little more juice in the tank - FTSE +22, DAX +21, CAC +9 courtesy of IG at 5.06am
You might have thought that the sight of anti-Trump demonstrations at several major US cities overnight would alarm the markets. But right now, they’re more interested in the next president’s promise of a fiscal stimulus.You might have thought that the sight of anti-Trump demonstrations at several major US cities overnight would alarm the markets. But right now, they’re more interested in the next president’s promise of a fiscal stimulus.
Also, the graceful and mature way that Hillary Clinton and Barack Obama reacted to Trump’s win has also calmed nerves -- investors like a peaceful transfer of power.Also, the graceful and mature way that Hillary Clinton and Barack Obama reacted to Trump’s win has also calmed nerves -- investors like a peaceful transfer of power.
7.03am GMT7.03am GMT
07:0307:03
SUMMARYSUMMARY
A huge recovery on Asia Pacific’s stock markets as the region followed the lead of the US and Europe. Plenty of commentators have doubts about whether the upbeat impact of Trump’s victory can be sustained across the region but the impact is overwhelmingly positive for now.A huge recovery on Asia Pacific’s stock markets as the region followed the lead of the US and Europe. Plenty of commentators have doubts about whether the upbeat impact of Trump’s victory can be sustained across the region but the impact is overwhelmingly positive for now.
Here are the main points of the day so far:Here are the main points of the day so far:
Thanks for reading – the indefatigable Graeme Wearden will take the reins from London in a moment.Thanks for reading – the indefatigable Graeme Wearden will take the reins from London in a moment.
6.42am GMT6.42am GMT
06:4206:42
Trump's Asian business boostTrump's Asian business boost
Oliver HolmesOliver Holmes
Oliver Holmes, our south-east Asia correspondent, has been looking at the impact of Trump’s win on his business interests in the region.Oliver Holmes, our south-east Asia correspondent, has been looking at the impact of Trump’s win on his business interests in the region.
Oliver writes:Oliver writes:
Despite the global downturn, two companies in the Philippines and Indonesia that are linked to Trump saw their shares soar on news that he had been elected president.Despite the global downturn, two companies in the Philippines and Indonesia that are linked to Trump saw their shares soar on news that he had been elected president.
Shares in a Philippine firm building a 57-storey Trump Tower in Manila jumped by a massive 20%, from 1.22 to 1.47 US cents on the local stock market. The main index on the Philippine Stock Exchange fell, however, by 2.5%.Shares in a Philippine firm building a 57-storey Trump Tower in Manila jumped by a massive 20%, from 1.22 to 1.47 US cents on the local stock market. The main index on the Philippine Stock Exchange fell, however, by 2.5%.
In Indonesia, shares in a company controlled by Trump’s local business partner, tycoon Hary Tanoesoedibjo, also surged by 23%. The Jakarta stock exchange dropped by 1.4% on Wednesday.In Indonesia, shares in a company controlled by Trump’s local business partner, tycoon Hary Tanoesoedibjo, also surged by 23%. The Jakarta stock exchange dropped by 1.4% on Wednesday.
Trump and Tanoesoedibjo plan to build a resort and a golf course in west Java, projects that many in Indonesia — the world’s largest Muslim-majority nation — condemned last year when Trump called for a ban on Muslims entering the United States.Trump and Tanoesoedibjo plan to build a resort and a golf course in west Java, projects that many in Indonesia — the world’s largest Muslim-majority nation — condemned last year when Trump called for a ban on Muslims entering the United States.
6.39am GMT6.39am GMT
06:3906:39
Nikkei closes up 6.72%Nikkei closes up 6.72%
A huge day for the Japanese stock market which soared 1,092.88 points to 17,344.42, a rise of 6.72%.A huge day for the Japanese stock market which soared 1,092.88 points to 17,344.42, a rise of 6.72%.
6.14am GMT6.14am GMT
06:1406:14
There have been big moves in the bond markets in the past 24 hours as investors have dumped the safety of government paper in favour of equities and the dollar.There have been big moves in the bond markets in the past 24 hours as investors have dumped the safety of government paper in favour of equities and the dollar.
After Trump's win, Pimco and other bond traders are seeing fast-tracked Fed. https://t.co/3iQxd6y3Xr pic.twitter.com/hmdRuZF1ACAfter Trump's win, Pimco and other bond traders are seeing fast-tracked Fed. https://t.co/3iQxd6y3Xr pic.twitter.com/hmdRuZF1AC
Yields on US Treasury 10-year notes reversed an initial plunge to 1.716% and bolted to 2.09% overnight as the price of bonds dropped. The net rise of 21 basis points was the largest daily increase since July 2013, Reuters said.Yields on US Treasury 10-year notes reversed an initial plunge to 1.716% and bolted to 2.09% overnight as the price of bonds dropped. The net rise of 21 basis points was the largest daily increase since July 2013, Reuters said.
There’s also an expectation that the Fed will raise rates in December, with a possible US fiscal stimulus seeing the return of inflation and more rate rises.There’s also an expectation that the Fed will raise rates in December, with a possible US fiscal stimulus seeing the return of inflation and more rate rises.
Imre Speizer, an economist at Westpac, said:Imre Speizer, an economist at Westpac, said:
An astonishing turnaround in risk appetite pushed equities and Treasury yields higher. Markets appeared to reassess the economic outlook under Trump, towards one of higher growth and higher inflation.An astonishing turnaround in risk appetite pushed equities and Treasury yields higher. Markets appeared to reassess the economic outlook under Trump, towards one of higher growth and higher inflation.
5.59am GMT5.59am GMT
05:5905:59
European and US markets to open upEuropean and US markets to open up
Futures trading suggests Europe and the US will rejoin the party when the markets open later today.Futures trading suggests Europe and the US will rejoin the party when the markets open later today.
Spread better IG sees the FTSE100 up 0.5% at 6940 points, while the Dax in Germany will be up 0.68% at 10,715 points.Spread better IG sees the FTSE100 up 0.5% at 6940 points, while the Dax in Germany will be up 0.68% at 10,715 points.
The Dow Jones on Wall Street is set to open up around 60 points.The Dow Jones on Wall Street is set to open up around 60 points.
5.53am GMT5.53am GMT
05:5305:53
The Nikkei has gone even better than the ASX today with a rise nearly 7%, helped by a drop in the yen as the US dollar received a Trump bump as we might now have to call it.The Nikkei has gone even better than the ASX today with a rise nearly 7%, helped by a drop in the yen as the US dollar received a Trump bump as we might now have to call it.
But the authorities are still worried that they might have to act to keep the yen down in future.But the authorities are still worried that they might have to act to keep the yen down in future.
Hiroshi Watanabe, former vice finance minister for international affairs, told Reuters that “if the yen spikes by 3 yen or more, Japan should not hesitate to intervene”, regardless of US concerns about such action.Hiroshi Watanabe, former vice finance minister for international affairs, told Reuters that “if the yen spikes by 3 yen or more, Japan should not hesitate to intervene”, regardless of US concerns about such action.
If Japan hesitated to intervene out of deference (to Trump), it would not be able to act for the coming four years.If Japan hesitated to intervene out of deference (to Trump), it would not be able to act for the coming four years.
Japan has not intervened in currency markets since Nov. 2011.Japan has not intervened in currency markets since Nov. 2011.
5.44am GMT5.44am GMT
05:4405:44
Toot toot!AUSTRALIAN STOCKS RIDE THE TRUMP RALLY: What you need to know (via @BIAUS) https://t.co/gf8DoGW10WToot toot!AUSTRALIAN STOCKS RIDE THE TRUMP RALLY: What you need to know (via @BIAUS) https://t.co/gf8DoGW10W
Biggest gains on the ASX200 today: $ACX up 13.7%, $SGM up 13.6%, $BSL up 13.5%, $WSA up 12.1%, $CPU up 12% #ausbizBiggest gains on the ASX200 today: $ACX up 13.7%, $SGM up 13.6%, $BSL up 13.5%, $WSA up 12.1%, $CPU up 12% #ausbiz
5.37am GMT
05:37
Australian market closes up 3.34%
It’s been a good day for investors down under – the best in fact since 2011, AAP reports.
The ASX/S&P200 has closed up 172.2 points, or 3.34%, at 5,328.8 points, adding $50bn to the market’s value, more than making up for yesterday’s losses.
Mining and construction stocks led the way on hopes of a boom in the US.
Surging iron ore prices also helped, soaring past the 2016 peak to $71 a tonne. Copper – a key construction material – also jumped 4% to a 16-month high, Reuters reported.
Updated
at 5.44am GMT
5.21am GMT
05:21
There’s a lot of commentary around today about Trump’s trade policies and what they will mean for the global economy.
We’ve already heard from JP Morgan and Saul Eslake. And here’s Paul Bloxham from HSBC in Australia, speaking to Australian Associated Press.
For Australia, the main negative impact seems likely to be the effect that reduced global trade could have on Asian growth, given Asia’s high trade reliance. Continued strengthening of Australia’s economic ties to China should be a priority as it would help support local growth even in the face of rising global trade protectionism.
But Standard Life, in a research note quoted by AAP, saw the possibility that Trump could moderate his campaign promises, which included putting tariffs of 45% on Chinese goods and 35% on Mexican goods, in order to avoid disruption.
It is plausible that the new administration will not ramp up tariffs on Mexican and Chinese imports, content instead to bury the prospect of new trade agreements and make more use of enforcement clauses in existing agreements.
4.53am GMT
04:53
'Trump won't force Yellen to quit' – adviser
Trump won’t force Janet Yellen to resign as chair of the Federal Reserve, according to an adviser, despite speculation that he might try to end her term prematurely.
Judy Shelton, an economist and senior fellow at the Atlas Network and adviser to Trump on monetary policy, told the Wall Street Journal that “he’s not urging her to resign at all”.
However, the Journal reports that Shelton did concede that Trump was minded to replace Yellen when she completes her first term in 2018.
He’s saying he’d want someone whose thinking is more in keeping with his own.
Trump was openly critical of Yellen in one of the presidential debates in September, saying that interest rates had been kept too low and that asset bubbles created by loose monetary settings would eventually burst.
4.29am GMT
04:29
Risk to global growth has increased – JP Morgan
JP Morgan’s team in Australia have been looking at what Trump’s win could mean for the global economy – and Australia’s.
They say that a US fiscal stimulus would have limited benefits for the rest of the world while trade barriers could mean trouble for trading partners.
A US policy-induced trade shock will be negative for global growth. This leaves risks to global growth more asymmetric than was previously the case. Second, the distribution of risks to Chinese growth have shifted to the downside, given the increased probability of rising tensions in US-China trade relations and weaker Chinese export growth.
A trade shock could in turn damage the US.
A marked slowing in US growth might not be an issue, except that growth in the rest of the global economy doesn’t look robust enough – particularly given limited scope for additional policy support – to provide much of a buffer. And even in the event that US growth slows on a trade shock, this will likely be more inflationary (via higher import prices) than would have otherwise been the case, meaning that the growth and inflation trade-off in the US becomes less favourable.
And that means that interest rate cuts are back on the horizon in Australia.
For the RBA, we think this underscores the risk that rates are likely to go lower in Australia. All else equal, domestic growth needs to be stronger to provide an offset to external shocks, should they occur.
4.02am GMT
04:02
US billionaire Carl Icahn apparently cashed in on the stock market panic over Trump’s election victory.
The longtime Trump supporter told CNN Money that he left the Republican’s victory party in Manhattan in the early hours of Wednesday to go home and buy “a lot of stock” in the plunging overnight market.
I’m glad I did that. I guess that’s what makes me happy today too ... I personally don’t believe that Trump is bad for the market necessarily.
3.21am GMT
03:21
SUMMARY
OK, the stock markets have proceeded magisterially today despite a background of major tectonic shifts in the financial landscape.
Here are the main points:
3.08am GMT
03:08
More on the implications for Asia’s big emerging economies – and Australia.
Saul Eslake, the independent economist, has warned about the implications for Asutralia if Trump were to start a trade war with China and undermine the Fed, pushing the US dollar down.
[This would create] a great deal of uncertainty in our part of the world, about the geopolitical environment by making a less wholesome commitment to longstanding US alliances with countries like South Korea and Japan ... Those things, particulary a trade war with China, would be highly negative for Australia.
Saul Eslake: the Australian economy will be negatively impacted if @realDonaldTrump starts a trade war with China https://t.co/gvPVUtJ8pM
2.55am GMT
02:55
Like every measure in the last 24 hours, the US dollar has been topsy-turvy. The chance of a Fed rate cut dropped to 30% on Wednesday but is now more than 80%, according to IG.
#Fed to proceed with December U.S. rate rise despite #Trump upset: @ReutersPolls https://t.co/Jt0UCpNHT5
The dollar index against major currencies recovered from 95.885 on Wednesday to around 98.448 on Thursday.
But the longer-term outlook is uncertain as Trump pushes his protectionist agenda (see below). Tim Condon, an Singapore-based economist at ING, told Reuters:
We expect a Trump Treasury to elevate the importance of the bilateral trade surplus with the US in identifying currency manipulators and intensify pressure on trade partners to allow currencies to appreciate.
2.39am GMT
02:39
Yuan fixed at lowest point since 2010
The yuan has been fixed today at 6.7885 – its lowest point since September 2010.
Bearing in mind that Trump labelled China a “currency manipulator” on his way to winning the presidency, the issue could prove to be a flashpoint between the two countries.
China has pushed the value of its currency steadily downwards in the past year – very clumsily to begin with, sparking last year’s mini-stock market crash – as it tries to export its way out of slowing economic growth.
Chart: Renminbi (USD/CNY) 1-month forward rate - pic.twitter.com/uFsDKHRJmu
But everyone else has got the same idea (including Abe of course). The US dollar is holding its gains on Thursday and was sitting at 105.32 yen, up from below 102 on Wednesday. But for Trump’s manufacturing recovery to work you expect that he will want it come down.
2.14am GMT
02:14
Shinzo Abe 'to meet Trump on 17 November' – official says
The Japanese prime minister Shinzo Abe is planning to meet the US president-elect in New York on 17 November, a Japanese government official has said.
Reuters reports that the pair had “talked by telephone and confirmed close cooperation between their two nations”.
It might be interesting to hear what they have to say to each other about trade and the economy. Like China, Japan has a lot to be worried about. Trump is an avowed opponent of the Trans Pacific Partnership trade deal which would be a huge blow for Abe’s plans to boost his country’s huge manufacturing sector.