Dow hits record high as markets react to Trump election victory

(c) Sky News 2016: <a href="http://news.sky.com/story/asian-markets-bounce-back-to-recover-from-trump-election-turmoil-10651804">Dow hits record high as markets react to Trump election victory</a>
 

It's a mixed day on world stock markets, as investors brush aside their initial shock at Donald Trump's unexpected US election victory.

The Dow Jones Industrial Average touched a new record high of 18,731 in early trading on Wall Street on Thursday, with traders citing hopes that Trump's victory speech will result in a spending spree to bolster US economic growth.

US bank stocks were up sharply amid expectations of less regulation and higher interest rates to boost their earnings.

However tech stocks, such as Apple (NasdaqGS: AAPL - news) , suffered as money was placed in assets likely to benefit from Federal investment such as construction firms.

Earlier, Asian markets recouped losses accumulated on Wednesday by following European and US markets higher.

Japan's Nikkei climbed nearly 7% by the close.

But early positivity in London petered out following its 1% gain on Wednesday.

The FTSE 100 climbed 0.9% in early trading but later came under pressure as the dollar lost some of its strength against the pound.

It closed 1.2% or 83 points lower at 6,827 - with sterling 1% up at $1.2530.

Germany's DAX and the CAC in Paris also closed in negative territory.

Markets had been nervous about the prospect of a Trump presidency up-ending the global political order and tearing up long-standing trade arrangements.

But sentiment calmed after his acceptance speech which eschewed some of the more confrontational rhetoric deployed during the campaign.

Instead he put the emphasis on reuniting a divided America, putting millions into work through large-scale infrastructure projects and dealing fairly with other countries.

Analsysts said the 

CMC Markets (LSE: CMCX.L - news) strategist Michael McCarthy said it appeared a consensus was building that much of Trump's extreme rhetoric during the campaign "was a sales pitch rather than a commitment to act".

"Investors ignored the potential for damage to international trade and growth prospects and focused on Republican control of both houses of Congress as well as the White House."

"This offers the prospect of reform that could stimulate the US economy."

Craig Erlam, senior market analyst at OANDA, said: "Trump's speech following the victory was hugely influential in yesterday's sudden U-turn, as he focused more on unity and the need to spend to get the economy growing again.

"These policies combined with his desire to deregulate and lower taxes are all very market-friendly.

"The stance he takes on trade will likely determine how vulnerable the markets are, but in reality these are very long-term policies and for now, markets are more focused on the prospect of lower taxes, fiscal stimulus and less regulation."
 

:: Watch every twist and turn of the US election fallout live on Sky News.

Read more:
:: Donald Trump wins: US election results in full
::  Nasty campaign to give way to civilised handover
:: Brand Trump: Conflict of interest for tycoon
:: President Trump: What could possibly go wrong?
:: Sky Views: Trump a threat to global free trade

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