US elections: Asian stocks tumble as Trump elected US president in shock win

Businessmen talking in front of an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange (TSE) in Tokyo on Nov 9, 2016.
Businessmen talking in front of an electric quotation board flashing the Nikkei key index of the Tokyo Stock Exchange (TSE) in Tokyo on Nov 9, 2016. PHOTO: AFP

HONG KONG - Asian stocks slumped the most since June in volatile trading as Republican Donald Trump won the United States presidential race, shocking investors who had expected Democrat Hillary Clinton to win.

The MSCI Asia Pacific Index fell 2.7 per cent to 134.19 as of 5.10pm in Tokyo, with short-term volatility spiking on Wednesday as Mr Trump stunned traders by defeating Mrs Clinton to become the 45th president of the US.

Markets from Japan to India fell the most since at least June 24, when Britain shocked investors by opting to leave the European Union, as investors dumped global risk securities and bought safe-haven assets including the yen and gold.

Singapore's Straits Times Index decreased 1.08 per cent, nearly 30 points lower, to end the day at 2,789.88.

"This is on a completely different level to Brexit," said Norihiro Fujito, a Tokyo-based senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "The framework of the world will change, not only in terms of economies and the financial markets, but also in terms of national security, foreign policy."

After starting the day higher, the Asian equity benchmark soon erased those gains as results started pouring in showing Mr Trump edging ahead of Mrs Clinton in the most contentious US election in recent history.

 

The gauge languished near the day's lows as it became clear that the real-estate developer and reality-TV star was gaining an upper hand in key states, putting him on course to become the president.

Just 81 shares rose compared with 899 stocks that fell on the Asian benchmark, while trading volume doubled in markets including Japan, Hong Kong and South Korea. The Topix Index slumped 4.6 per cent for its biggest drop since June 24, dragged lower by exporters after the yen jumped the most in three months.

Taiwan's Taiex Index fell 3 per cent, its biggest loss since August last year. South Korea's Kospi index lost 2.3 per cent, New Zealand's S&P/NZX 50 Index dropped 3.3 per cent and Australia's S&P/ASX 200 Index declined 1.9 per cent. Hong Kong's Hang Seng Index slid 2.2 per cent and China's Shanghai Composite Index fell 0.6 per cent, retreating from a 10-month high.

"Much like Brexit, the polls and the betting websites going into the elections were telling us a Trump victory isn't going to happen," said Mark Matthews, Singapore-based head of Asia research at Bank of Julius Baer. The market wasn't prepared for a Trump victory, he said.

"There's still lack of clarity in terms of how this would pan out for markets in the next few days," said Jingyi Pan, a market strategist at IG Asia Pte in Singapore. "Investors would want to hear the take of central banks globally and also from the president elect."

The MSCI Asia Pacific Index had fallen 3.1 per cent from its September peak through Tuesday, as global investors looked to the election, which puts the leadership of the world's largest economy at stake at a time when America is divided over immigration, trade and the country's role in the wider world. Speculation Trump may win the election spurred swaps traders to trim wagers on tighter US monetary policy, with market-implied chances of a December rate hike by the Federal Reserve plunging below 50 per cent.