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European stock market rally runs out of steam Wall Street's Dow and S&P 500 indexes jump at the open
(35 minutes later)
A rally in European shares looked to be slowing after a strong start to the trading day that followed a rebound in Asian and US stock markets. Wall Street stock markets have extended their rally, with the Dow Jones index hitting an intra-day all-time high and S&P 500 closing in on a record.
Hopes that Donald Trump's US victory will introduce a pro-business agenda blunted concerns about his win.Hopes that Donald Trump's US victory will introduce a pro-business agenda blunted concerns about his win.
But in early afternoon trading, the FTSE 100 gave up a 1% gain, while stock markets in Frankfurt and Paris also drifted back from morning highs. That prompted a jump in US and Asian markets on Wednesday, sparking strong rises in Europe on Thursday morning.
Earlier, there were big jumps in Asia, where Japan's Nikkei 225 soared 6.7%. Although Europe's rally showed signs of waning, the Dow Jones opened up 0.8% at 18,731.17 points.
In the US, the futures index suggested that Wall Street would open almost 1% higher. The S&P 500 index was 0.6% ahead at 2,176 points, while the Nasdaq rose 0.6% to 5,282. Bank shares, buoyed by hopes that Mr Trump will relax financial regulation, were among the biggest Wall Street gainers.
However, the FTSE 100 sank back into negative territory, sitting about 0.25% down at 6,894.94 points. Germany's Dax and France's Cac indexes, which had been more than 1% ahead, were about 0.3% and 0.5% up. In Europe, however, the FTSE 100 sank back into negative territory, sitting about 0.25% down at 6,894.94 points. Germany's Dax and France's Cac indexes, which had been more than 1% ahead, were about 0.3% and 0.5% up.
Mark Dampier, analyst at Hargreaves Lansdown, told the BBC that some investors were taking profits. He forecast continued volatility as the markets digested what a Donald Trump presidency would mean.Mark Dampier, analyst at Hargreaves Lansdown, told the BBC that some investors were taking profits. He forecast continued volatility as the markets digested what a Donald Trump presidency would mean.
But Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: "Perception now is that the controversial multi-billionaire TV presenter and property mogul could be good for business; and talk of tax cuts and heavy spending on infrastructure would certainly be good for growth," said Lee Wild, head of equity strategy at stockbroker Interactive Investor.But Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: "Perception now is that the controversial multi-billionaire TV presenter and property mogul could be good for business; and talk of tax cuts and heavy spending on infrastructure would certainly be good for growth," said Lee Wild, head of equity strategy at stockbroker Interactive Investor.
CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Mr Trump's rhetoric during the campaign "was a sales pitch rather than a commitment to act".CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Mr Trump's rhetoric during the campaign "was a sales pitch rather than a commitment to act".
The FTSE 100's strong start to the day came after gains in Asia and on Wall Street. The Nikkei's 6.7% rise saw it more than recover losses from the previous session. Hong Kong's Hang Seng closed 1.9% higher. The FTSE 100's strong start to the day came after gains in Asia and on Wall Street. Japan's Nikkei index closed up 6.7%, more than recovering losses from the previous session. Hong Kong's Hang Seng closed 1.9% higher.
On the currency markets, sterling rose 0.39% against the dollar to $1.2455, and was slightly up against the euro at €1.1368.On the currency markets, sterling rose 0.39% against the dollar to $1.2455, and was slightly up against the euro at €1.1368.
Traders had expected Hillary Clinton to beat Mr Trump to become the next US president. His victory initially sent money flowing into stocks that were deemed to be safer, as well as traditional haven assets such as gold and currencies including the yen.Traders had expected Hillary Clinton to beat Mr Trump to become the next US president. His victory initially sent money flowing into stocks that were deemed to be safer, as well as traditional haven assets such as gold and currencies including the yen.
"Investors were risk averse yesterday, then after seeing that Americans were optimistic and chasing the market higher, they wasted no time reversing their positions," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo."Investors were risk averse yesterday, then after seeing that Americans were optimistic and chasing the market higher, they wasted no time reversing their positions," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.
"Some of the investors must be thinking that they shouldn't have sold after all.""Some of the investors must be thinking that they shouldn't have sold after all."
'Campaign bluster''Campaign bluster'
Kathleen Brooks, an analyst at City Index, suggested Mr Trump's acceptance speech, in which he called for the country to unite, had helped to settle some of the market jitters.Kathleen Brooks, an analyst at City Index, suggested Mr Trump's acceptance speech, in which he called for the country to unite, had helped to settle some of the market jitters.
And Nariman Behravesh, chief economist at IHS Markit said that "after the initial shock, investors seem to feel that a Trump administration could be good news for US businesses, with lower taxes and a reduced regulatory burden".And Nariman Behravesh, chief economist at IHS Markit said that "after the initial shock, investors seem to feel that a Trump administration could be good news for US businesses, with lower taxes and a reduced regulatory burden".
He added that while Mr Trump had set out several broad economic policies, including corporate tax breaks and the renegotiating or scrapping of trade deals, there was no certainty these would go ahead.He added that while Mr Trump had set out several broad economic policies, including corporate tax breaks and the renegotiating or scrapping of trade deals, there was no certainty these would go ahead.
"As in the past, it is unclear how much of the campaign bluster will translate into actual policy initiatives.""As in the past, it is unclear how much of the campaign bluster will translate into actual policy initiatives."