Thursday 23 November 2017

Iseq Trumps other markets after US election shock

Traders work on the floor of the New York Stock Exchange (NYSE) the morning after the US presidential election in New York City. Photo: Reuters
Traders work on the floor of the New York Stock Exchange (NYSE) the morning after the US presidential election in New York City. Photo: Reuters

Ireland's Iseq Overall Index defied the US Presidential election result yesterday, jumping more than 2pc as shares in CRH surged over 8pc on hopes it will be a major beneficiary from Donald Trump's plan for massive investment in US infrastructure.

European bourses opened lower after Asian markets were hit overnight as it became clear that Mr Trump was tracking towards a landmark win. US futures also indicated that markets there would plunge when they opened.

Soon after European markets opened, the UK's FTSE-100 was 1pc lower. Germany's DAX and France's CAC-40 were also down.

The Stoxx Europe 600 Index rose 0.6pc by mid-afternoon, after earlier dropping as much as 2.4pc.

The volume of shares changing hands yesterday was almost double the 30-day average.

The Iseq opened lower but quickly reversed the losses as shares in CRH rose. By mid-afternoon yesterday, they were 8.4pc higher at €32.28.

The Iseq was 2.2pc higher an hour before the close, at 6,225.20.

Shares in Bank of Ireland were flat at 20 cent at that time, having see-sawed throughout the session. At one stage they were more than 2pc higher.

Shares in Ryanair were 2.3pc higher at €13.98. By the middle of the afternoon, the UK's FTSE-100 was up 0.55pc. The DAX was 0.37pc higher, and France's CAC-40 edged up 0.11pc.

Turbulence in financial markets calmed after a knee-jerk sell-off in stocks and rally in haven assets as investors reassessed the effects of Donald Trump's surprise victory.

The S&P 500 Index fluctuated as losses in consumer and technology companies offset a rally in healthcare and bank shares.

"It's an amazingly impressive recovery off the lows for risk assets," said Craig Collins, managing director of rates trading at Bank of Montreal in London.

"It's very surprising given the feel the session had to start with, that it was a massive risk-off flight to quality bid. Now the early losses are getting erased and it looks like it could go unchanged on the day by the time the US gets in," he added.

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.

US healthcare shares surged as investors unwound bets that a win by Hillary Clinton would bring intense regulatory scrutiny. (Additional reporting Bloomberg)

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