European stocks drop at open on Trump win

Advertising

London (AFP)

European stocks tumbled in opening trade on Wednesday after Donald Trump was elected US president, beating market favourite Hillary Clinton and sparking investor fears over the world economy.

In initial deals, London's benchmark FTSE 100 index shed 1.87 percent to 6,718.85 points, Frankfurt's DAX 30 dived 2.9 percent to 10,181.89 points and the Paris CAC 40 index slid 2.8 percent to 4,350.07 compared with Tuesday's close.

Markets however quickly retraced ground within fifteen minutes of the open, with London standing just 0.50 percent lower at 0820 GMT.

The Amsterdam AEX stocks index tanked briefly by 3.09 percent on opening, but rallied to stand at 1.59 percent lower at 443,02 points.

Republican Trump defeated his Democratic rival to become the 45th president of the United States, sending shockwaves across global stock markets.

"This is another black swan for European stocks -- despite Brexit, markets were still not prepared for a Trump win and stocks will bear the biggest brunt of it," City Index analyst Ken Odeluga told AFP.

"It is a long-term negative for global growth because of the protectionist instincts of President Donald Trump.

"Global trade will be curbed and the biggest multinationals face challenges to revenue growth as the expansion of globalisation itself comes into question."

Meanwhile, returns on German government bonds -- seen as a safe haven during market turbulence -- fell sharply as investors rushed to purchase the assets.

The yield, or the return on investment to investors, on 10-year Bunds fell to 0.098 percent in early trading on the secondary market, compared to 0.188 percent at the close on Tuesday.