Australian stocks follow global recovery lead


Australian shares are more than three per cent higher, after US and European markets regrouped from an initial Trump win inspired sell-off to finish strongly up

The Australian share market has staged a spectacular turnaround, rising more than three per cent in early trade, after US and Europe markets recovered from early losses following Donald Trump's presidential election win.

The benchmark S&P/ASX 200 index was up 3.12 per cent at 1044 AEDT on Wednesday.

IG market strategist Evan Lucas described it as an "extraordinary swing" after local stocks closed 1.9 per cent lower on Wednesday as counting showed Mr Trump edging closer to the White House.

In early Wednesday trade, the market gained more than one per cent as initial vote counts prompted hopes Democrat Hillary Clinton would win.

It was a similar story around the world. Stock markets initially dropped sharply, before rebouding after Mr Trump's victory, more humble and conciliatory speech.

"Markets turned from predicting economic disaster to optimism about potential for economic reform," CMC Markets chief market strategist Michael McCarthy said.

"In one of the most extraordinary trading sessions ever, Dow futures went from more than 800 points deficit to close 247 points higher."

The Dow Jones Industrial Average closed 1.4 per cent higher, while the S&P500 and the Nasdaq each rose 1.11 per cent.

"From a markets perspective, the risks that he was trumpeting up during the primaries and than the presidential campaign are already sort of starting to melt away very quickly," Mr Lucas said.

Mr Trump's victory also removes the chance of the US Federal Reserve raising rates in December, which is positive for market liquidity, he said.

Mr Lucas said he expected global markets to remain volatile for a few more days before returning to a more "normal" trading pattern ahead of Mr Trump's swearing in as president in January.

Locally, materials, energy, health care and financial companies were big winners on Thursday.

BHP Billiton and Rio Tinto were up $1.91, or 8.47 per cent, to $24.47 and $4.14, or 7.6 per cent, to $57.87, respectively.

Energy companies Woodside Petroleum, Santos and Origin Energy were up between three to four per cent.

Within the heavyweight financial sector, Commonwealth Bank, jumped $2.18, or 3.08 per cent, to $73.07.

Asian shares join Wall Street rally as Trump fears ease

Asian shares rallied Thursday, extending a surprising global recovery as Donald Trump's conciliatory acceptance speech comments helped soothe world financial markets spooked by his unexpected US election victory.

The rebound in Asia took its lead from Wall Street, where stocks initially wavered before advancing the rest of the day. Major US benchmarks all finished more than 1 percent higher, with the Dow Jones industrial average near a record high close.

Japan's share benchmark, the Nikkei 225 index, which was among the biggest losers on Wednesday, jumped 6 per cent at the open. By midday it was up 5.7 per cent at 17,178.87.

The dollar also recovered in currency trading. It was at 105.33 yen after dropping to near 101 yen the day before.

In other Asian trading, South Korea's Kospi advanced 1.9 per cent to 1,996.31 and Hong Kong's Hang Seng added 2 per cent to 22,865.45. The Shanghai Composite index in mainland China rose 1 per cent to 3158.34 and Australia's S&P;/ASX 200 surged 2.7 per cent to 5297.10.

Benchmarks in Taiwan, Singapore, the Philippines, Indonesia and Thailand also advanced.

Trump pledged in his speech Wednesday to unify a deeply divided nation, helping to calm jitters in global financial markets. Investors had worried because his campaign promises carried few policy details, making him an unknown quantity compared with his rival, Hillary Clinton, seen as a safe choice.

"The stunning turn in sentiment suggests there is now a consensus building that much of the policy announced during the campaign was a sales pitch rather than a commitment to act," said Michael McCarthy, chief strategist at CMC Markets.

"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," he added.

Investors hope Trump plans for infrastructure spending, tax cuts and lighter regulation will benefit the US economy, the world's biggest.

On Wall Street, Dow climbed 1.4 per cent to close at 18,589.69. The Standard & Poor's 500 index gained 1.1 per cent to 2163.26. The Nasdaq composite index 1.1 per cent, to 5251.07.

In other currencies, the Mexican peso was steady after declining 8 per cent versus the dollar on fears Trump would cancel favorable trade deals with Mexico.

The dollar weakened 0.4 per cent to 19.78 Mexican pesos. The euro edged up to $1.0945 from $1.0930.

Oil prices stabilised. Benchmark US crude futures slipped 15 cents to $45.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 29 cents to close at $45.27 a barrel Wednesday. Brent crude, used to price international oils, edged up 1 cent to $46.37 a barrel in London.

Key facts

  • At 1044 AEDT, the benchmark S&P/ASX 200 index was up 160.7 points, or 3.12 per cent, at 5317.3 points.
  • The broader All Ordinaries index was up 159.2 points, or 3.04 per cent, at 5,397.5 points.
  • The December share price index futures contract was up 150 points at 5302 points, with 26,246 contracts traded.
  • National turnover was 846.3 million securities traded, worth $1.78 billion.

Source AAP

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