New Zealand share prices have rallied sharply in response to a post-election rebound on Wall Street, but markets remain jittery at the uncertainty over a Donald Trump presidency.
The billionarie businessman and former reality TV star stunned the world, beating Democrat Hillary Clinton on Tuesday night (local time) in the race for the White House.
His election as US president saw a plunge on markets in the Asia-Pacific region on Wednesday.
The NZX-50 index jumped by 3.3% in the opening minutes of trade on Thursday. After 15 minutes, the index was up 221 points at 6885.3 - wiping out yesterday's losses.
In the United States, the Dow Jones Industrial Index rallied by 257 points or 1.4% after futures market trading had earlier pointed to a severe, election-inspired, fall.
Australia's market was first yesterday to feel the brunt of investor fear for what the controversial Republican's ascendancy to the White House will mean for global trade and politics, given his staunch opposition to free trade deals and strong criticism of China, the world's second-largest economy.
More than $A35 billion was wiped from the value of Australian shares and the Aussie dollar also took a hit against its US counterpart, even as the greenback fell against the euro and the yen.
After Australia's benchmark S&P/ASX200 closed at a four-month low, the rout continued across Asia with Japan's Nikkei index down 5.4% and Hong Kong dropping 3%.
Earlier in the day, New Zealand's sharemarket tumbled as Trump took the lead, with every stock on the benchmark index falling. Xero, Heartland Bank and SkyCity Entertainment Group led the decline. The S&P/NZX 50 dropped 3.3% the biggest percentage loss in more than five years - or 230.14 points to 6664.22. Turnover was $NZ138 million.
Bonds and gold gained as investors flocked to safe havens.
Uncertainty was likely to be the tone of global markets in coming days. ANZ Bank researchers said the market volatility "clearly reflects enormous uncertainty".
"Simply, perceptions of heightened US economic nationalism are omnipresent," ANZ said.
Markets were also dealing with the uncertainty created by Mr Trump's inexperience in public office, his foreign policies and the budgetary impact of his tax policies.
Foreign exchange traders at RBC Capital Markets said the flight from risk in currency markets was likely to continue until Mr Trump's intentions as president become clear.
"Trump has been relatively quiet in recent weeks, so the next cue for investors will come from his acceptance speech and policy plans," RBC said.
"Longer-term, this is a big jump into policy uncertainty but it seems likely to lead to rising protectionism. That would favour countries with stronger domestic demand and hurt small open economies."
CommSec economist Craig James said a more isolationist America - a central Trump policy - would be negative for the global economy and especially trade-reliant nations such as Australia.
"If the US adopted a more confrontationist policy toward China, then this would place downward pressure on the Aussie dollar," Mr James said, noting a weaker Australian currency would help exporters.
European stocks closed up 1.6% after having fallen as much as 2.3% on Wednesday.
US stocks bounce back
In the US, Wall Street stocks rose sharply on Wednesday, bouncing from a dramatic overnight sell-off, while the Mexican peso was battered as investors reacted to Mr Trump's surprise win.
After sharp declines in US stock futures overnight, equity investor panic eased but bond investors pushed up Treasury yields as they worried his policies would ultimately weaken the dollar and hike inflation.
US long-dated Treasury yields rose to 10-month highs on Wednesday, bolstered by expectations that Mr Trump will enforce protectionist trade policies that will weaken the dollar and boost inflation.
US 30-year bond yields, which move inversely to prices, gained 22 basis points in their biggest jump since August 2011. Benchmark US 10-year note yields climbed to their highest since January.
The US dollar hit its highest level against the Japanese yen in nearly four months. It gained support from the US equity turnaround as well as from the yield spreads, said Kathy Lien, managing director at BK Asset Management in New York.
The Mexican peso recouped some losses after falling to a record low. The currency has been vulnerable to Trump's threats to rip up a free trade agreement with Mexico and to tax money sent home by migrants to pay for building a border wall.
The three major US stock indexes rose as investors piled in to financial and healthcare stocks on hopes for less onerous regulations in those sectors than they had feared from a Hillary Clinton presidency.
Investors recalled that the market's dramatic decline after Britain voted in June to leave the European Union was short-lived and was ultimately seen as a buying opportunity.
But some money managers talked about near-term uncertainty as the world awaits January's inauguration for more concrete details of what a Trump presidency means.
In commodity markets, safe-haven gold sharply pulled back initial gains and was up 0.6% at $US1,276 an ounce after climbing as much as 4.9% to $US1,337.40.
Oil prices recovered along with US equities, with Brent crude up 0.8% at $US46.40 a barrel and US crude rising 0.9% to $US45.39.
- Reuters, AAP and NZ Herald
