Japan finance officials in emergency talks after USA election

As the reality of Donald Trump’s victory over Hillary Clinton begins to set in, global consequences are already rolling out, and they’re as scary as one might have predicted.

Emerging markets, thumped by Trump? Investors had feared Clinton would implement curbs on drug pricing increases that could hurt drugmakers and biotechnology companies.

Financial stocks were also heading sharply higher. The losers are interest rate sensitive stocks like utilities, real estate and consumer staples.

Crude oil also took a big hit as cash flees risky assets.

The Dow was down 64 points, or 0.4 percent, to 18,268.

The central bank last hiked its key rate in September by 50 basis points, lifting it to 4.75 percent to anchor inflation expectations following a sharp depreciation of the peso. It was the lowest for the yuan against the dollar in six years. “Donald Trump is not a person of institutions”. “You’ve also had the stock market come back overnight”.

“People realized that it is not the end of the world”.

While equity investors’ election night panic turned to daytime jubilation, bond investors anxious Trump’s protectionist policies would ultimately weaken the dollar and hike inflation.

Risk sentiment took a hit and the dollar tumbled against the yen early on Wednesday along with other risk currencies as it appeared that Donald Trump took the lead in the United States presidential election.

France’s Cac index and Germany’s Dax both closed about 1.5% higher after erasing losses of more than 2%. The peso sank 3 percent to a record low of 21.395 per dollar.

As Trump gained the lead in the electoral vote count, share prices tumbled in Asia, which were open during the election results.

“It’s time for America to bind the wounds of division”, Trump said as he addressed cheering supporters in Manhattan. As the result emerged Wednesday, the Mexican peso collapsed 11.5 percent. Trump has insisted that Mexico will pay for the wall. In comparison, the peso traded at roughly 13.50 pesos to the dollar two years ago, well before Trump announced his candidacy and the rhetoric of the 2016 election heated up.

Trump will not become president until January, but nearly immediately a transition will start and he will begin to announce members of his cabinet.

But the U.S.is Mexico’s largest trade partner. Japan’s benchmark Nikkei 225 index was the standout performer, rocketing 6.7 percent to close at 17,344.42 after sliding more than 5 percent the day before. In Hong Kong the Hang Seng index closed 2.3 percent lower.

Alex Edwards, currency analyst at UKForex said Trump’s “appeasing tone” had given some reassurance to markets.

The risk of a global trade war likewise hammered currencies across Asia, with the Australian dollar leading the rout.

A Trump victory had been portrayed by analysts as having the potential to unhinge markets banking on a continuation of policies that coincided with the second-longest bull market in S&P 500 history.

By comparison, the Dow fell 610 points, or 3.4% on June 24 after Britain’s shocking vote to leave the European Union.

Given Trump’s stance on free trade with its neighbours and immigration, economists have said the Mexican economy could fall into a contraction if he wins.

“Global markets are being shaken up”.