Trump victory speech helps soothe market concerns

Under the USA constitution, Trump doesn’t formally take the reins of power until January but he will begin the transition to his presidency nearly immediately.

Investors reportedly had viewed the prospect of a Clinton administration’s policies as mostly a continuation of the “status quo” established by President Barack Obama.

Observers cited Trump’s victory speech, in which he vowed to unite the country, as one factor that may have somewhat reduced investors’ concerns.

That drove industrials and infrastructure stocks higher, and raised speculation about inflation. That was helped by better-than-expected after mortgage data but other analysts also pointed to the potential for a boost in US infrastructure spending, which would drive more demand for the iron and other commodities Australia produces.

On the earnings front, Kohl’s, Macy’s and Ralph Lauren are among companies set to report before the bell. Britain’s FTSE was up 0.95 percent, Germany’s DAX rose 1.12 percent and France’s CAC was up 1.06 percent by 0415 ET.

Stocks are ending broadly higher on Wall Street, building on big gains a day earlier, as investors keep a close eye on the USA presidential election.

Oil prices stabilized. Benchmark U.S. crude futures slipped 15 cents to $45.12 a barrel in electronic trading on the New York Mercantile Exchange.

Japan’s Nikkei ended the morning up 0.3 per cent as the weaker yen boosted exporters, although it was down from earlier highs, while Shanghai was up 0.2 per cent and Sydney put on 0.3 per cent.

However, the muted reaction on Wall Street to Trump’s victory resulted in shares in Europe paring back big losses run up earlier in the trading day.

The upcoming Trump presidency, which will commence on January 20, will likely remain a key driver in markets for the rest of the year.

Wednesday’s early knee-jerk selloff in global stocks and a rally in haven assets reversed on wagers that Trump would increase fiscal spending to spur economic growth, and as he struck a more conciliatory tone in his first speech as president-elect.

Traders also bid up shares in defense contractors, anticipating the companies will thrive under a Trump presidency. After the open of trading in NY, U.S. stocks were roughly flat, though they rose by the early afternoon.

In metals trading, the price of gold slid $1 to $1,273.50 an ounce, while silver added 2 cents to $18.38 an ounce. Trump has repeatedly said he wants a wall built to keep illegal Mexican immigrants out of the United States and has threatened to tear up a North American trade agreement.

The Standard & Poor’s 500 index fell 6 points, or 0.3 percent, to 2,124. European markets saw similar upturns.

“The uncertainties surrounding the future economic and political outlook of the world´s biggest economy will likely cast a long shadow over emerging markets”, HSBC chief EM economist Murat Ulgen said in a note entitled: “Trump victory is a game changer for EM” “Risk aversion will likely cause EM financial stress to rise”, he added.