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Asian and European Stocks Rebound After Postelection Slump Wall St. Pulls Back From Earlier Highs
(about 7 hours later)
Stock markets in Asia traded sharply up on Thursday and European shares opened broadly higher, continuing a global rebound in share prices that followed a plunge after Donald J. Trump’s presidential victory. United States markets opened higher but turned mostly lower on Thursday, two days after the election of Donald J. Trump as the next president.
In Japan, the Nikkei 225 index closed up 6.7 percent. It had fallen about 5 percent on Wednesday. KEEPING SCORE The Dow Jones industrial average rose 0.53 percent, and the Standard & Poor’s 500-stock index was down 0.14 percent. The Nasdaq composite index tumbled 1.05 percent.
In Hong Kong, stocks were about 2 percent higher at the end of trading, making up for most of their drop on Wednesday. In Australia, shares closed 3.3 percent higher. EARLY MOVERS Shares of banks and other financial stocks rose the most, while utilities and real estate stocks lost ground.
Shares in Shanghai, which do not always track global markets, finished up 1.4 percent, having fallen by less than that amount on Wednesday. PRESIDENTIAL HOPES As well as taking comfort from Mr. Trump’s comments that he would look to unify a deeply divided nation, investors were focusing on his promises to lift economic growth through infrastructure spending and by cutting red tape, rather than uncertainties such as what he might do with trade agreements.
Stocks in London, Paris and Frankfurt moved higher as trading opened Thursday morning, but not as sharply as Asian markets. Before Mr. Trump’s victory speech, investors looked askance at the few policy details he had offered.
Asian stock markets plunged on Wednesday as Mr. Trump took commanding leads over Hillary Clinton in crucial states in the United States election, reflecting uncertainty over what Mr. Trump, a political neophyte and a critic of global trade deals, might do in office. THE QUOTE “Investors are keen to focus on the positive aspects of a Trump presidency rather than some of the more worrying pledges made during the campaign,” said Craig Erlam, a senior market analyst at OANDA.
European stocks also opened lower on Wednesday, but they rebounded later in the trading day after Mr. Trump gave a mild victory speech that included a pledge to increase American infrastructure spending. EUROPEAN MARKETS The market mood has turned around since the immediate aftermath of Mr. Trump’s victory. In Germany, the DAX rose 0.4 percent, and in France, the CAC 40 gained 0.5 percent. The FTSE 100 was down 0.4 percent in Britain. Russia was one of the biggest gainers in Europe as optimism there that Mr. Trump’s election would improve relations grew. The Micex index in Moscow was up 2.3 percent.
In the United States, the benchmark Standard & Poor’s 500-stock index closed up 1.1 percent on Wednesday. The Nasdaq composite index also ended up 1.1 percent, while the Dow Jones industrial average rose 1.4 percent. Trading volume was the heaviest since the market turmoil of late June after Britain’s vote to leave the European Union. ASIAN MARKETS The results of the American election prompted widespread selling on Wednesday in Asia. On Thursday, Asian shares posted hefty gains as they responded to the optimism subsequently recorded in Europe and the United States. The Nikkei 225 soared 6.7 percent in Japan, while in Hong Kong, the Hang Seng gained 1.9 percent. The Shanghai composite index added 1.4 percent in China. The Kospi climbed 2.3 percent in South Korea. In Australia, the S.&P./ASX 200 gained 3.3 percent.
“The market was quickly pivoted yesterday from doomsday scenario to refocus on what president-elect Trump means for both the global and U.S. economy,” Stephen Innes, a senior currency trader at Oanda in Singapore, said in a research note. “This will take some time to understand the implications, especially in the areas of trade, globalization and the Federal Reserve.” CURRENCIES One country keenly aware of potential problems ahead is Mexico. Mr. Trump repeatedly said he wanted a wall built to keep illegal Mexican immigrants out of the United States and has threatened to tear up the North American Free Trade Agreement.
Before the election on Tuesday, government bond interest rates had been inching upward. On Wednesday, there was a sharp sell-off of Treasury securities, pushing the yield — which moves in the opposite direction from the price — on the benchmark 10-year note past 2 percent for the first time since January. The yield ended Wednesday at 2.07 percent. On Thursday, the Mexican peso recouped some losses after plunging against the dollar on Wednesday. The dollar weakened 0.3 percent to 19.79 Mexican pesos, which was still near its lowest level in decades.
Similar bonds issued by Japan and Germany, which this year began offering negative yields, were creeping toward positive territory. Ten-year Japanese government bonds had a yield of 0.037 percent Thursday morning. In other currencies, the euro was down 0.3 percent at $1.0895, while the dollar rose 1.1 percent to 106.81 yen.
ENERGY In oil markets, United States benchmark crude oil fell 69 cents, to $44.58 a barrel on the New York Mercantile Exchange while Brent crude, used to price international oils, dropped 52 cents, to $45.84 a barrel in London.