World financial markets in turmoil

Traders work on the floor of the New York Stock Exchange on election day.
BRENDAN MCDERMID/REUTERS

Traders work on the floor of the New York Stock Exchange on election day.

Financial markets across the world have tumbled amid expectations Donald Trump will beat Hillary Clinton in the United States presidential election.

The Dow Jones futures market dropped nearly 700 points to 17,591 after the New York Times gave Trump a 94 per cent chance of victory. The index forecasts the value of the Dow Jones industrial average in December.

Futures on the S&P 500 and Nasdaq plunged by 5 per cent, a limit that triggers trading curbs to avoid a full-scale crash, and was last hit after the Brexit vote.

Nader Naeimi, the Sydney-based head of dynamic markets at AMP Capital Investors described the situation as "quite scary". 

The NZX50 closed down 3.3 per cent at 6664 and the ASX200 in Australia slipped 2 per cent to 5153.

Mexico's peso – a barometer for investors' perceptions of the American vote – crashed 11 per cent, while safe-haven demand pushed gold up by more than 3.5 per cent.

 

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Fisher & Paykel Healthcare chief executive Lewis Gradon said it would be business as usual for the country's largest listed technology exporter despite a 5 per cent fall in its share price.

"The bottom line is healthcare demand doesn't change based on the president. So we don't expect any fundamental impact to demand as a result of the presidential outcome."

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The company manufacturers for the US market from Mexico.

"It is just so hypothetical now what happens and what doesn't. We would expect to be in same boat as all of our competitors in this industry which manufacture in the 'Mexicos and the Chinas' of this world.

"We have an option to ship from New Zealand but it is so hypothetical to even start thinking about it now. What are you preparing for? Anything or nothing."

The fall in the peso would also make manufacturing in Mexico cheaper, he said.

Gradon queried the broad market reaction on the NZX to the US race. "Why does Ryman go down?" he queried, commenting on the rest home business whose stock is down 2.3 per cent.  

Japan's Nikkei 225 index dropped 2.2 per cent to 16,788.90, South Korea's Kospi skidded 2.6 per cent to 1,950.95 and Hong Kong's Hang Seng tumbled 2.3 per cent to 22,382.27.

"Rightly or wrongly, markets are going to be concerned about a Trump victory, particularly given the potential consequences for world trade and its impact on many large companies in the US stock market," said Ric Spooner, chief analyst at CMC Markets in Sydney.

"Like Brexit, the rally over the last two days increases the downside potential if Donald Trump does win the election," he added, referring to Britain's unexpected vote to leave the European Union that shook world markets.

Oil prices turned downhill on Wednesday, dropping more than 2 per cent to US$45 per barrel.

"Trump is getting a greater portion of the results than the polls showed going into tonight," said Chad Morganlander, a money manager at Stifel, Nicolaus & Co in Florham Park, New Jersey.

"This is going to be a long night and investors should be prepared for a tremendous amount of market instability over the next several hours"

- Stuff, Agencies

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