Asian markets, US dollar track global rebound as Trump fears ease, STI up 1.4%

US stocks rose sharply on Wednesday in a dramatic turnaround from deep overnight losses as Wall Street embraced the upset presidential election victory of Republican Donald Trump.
Asian shares rebounded on Thursday (Nov 10) and the US dollar rallied after global markets made a comeback from the shock of Donald Trump's presidential victory.
Asian shares rebounded on Thursday (Nov 10) and the US dollar rallied after global markets made a comeback from the shock of Donald Trump's presidential victory. PHOTO: BLOOMBERG NEWS

HONG KONG (AFP) - Asian equities soared on Thursday (Nov 10), joining a goldrush across world markets as the initial shock of Donald Trump's election win was replaced by hopes his plan to kickstart the US economy will succeed.

Trading floors were awash in red on Wednesday as the region's investors were the first to react to news that the controversial tycoon had defeated market-favourite Hillary Clinton, upending expectations.

However, a reassuring victory speech - followed by calls by Clinton and President Obama to get behind Trump - provided some encouragement to traders, sending risk assets rallying.

Most markets in Asia either wiped out or clawed back most of the previous day's losses, while the US dollar pushed higher.

The greenback had come under pressure on worries that uncertainty over Trump's policies would cause the Federal Reserve to hold off an interest rate rise, but analysts said those worries had abated for now.

Tokyo closed up 6.72 per cent, with a plunging yen also providing support. The dollar dallied with 106 yen before easing slightly, well up from Wednesday's low of 101.20 yen.

In the afternoon Hong Kong gained 2.2 per cent and Shanghai was 1.3 per cent up. Sydney closed 3.3 per cent higher, Seoul jumped two per cent and Taipei put on 2.4 per cent.

Singapore's Straits Times Index was up 1.39 per cent to 2,828.54 at 2:34pm.

CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Trump's extreme rhetoric during the campaign "was a sales pitch rather than a commitment to act".

"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," he said. "This offers the prospect of reform that could stimulate the US economy."

Grant Williamson, an investment adviser at brokerage Hamilton Hindin Greene in Christchurch, New Zealand, told Bloomberg News: "He'll certainly be friendly to American business and that could very well stimulate their economy."

The push back into higher-yielding, or riskier, investments also saw safe-haven gold tumble 1.3 per cent, buying US$1,286.56 - having spiked on Wednesday to almost US$1,340.

The Mexican peso, which hit a record low 20.78 against the dollar on Trump's win, also strengthened Thursday but it remains under pressure owing to fears about Trump's policy plans.

While on the campaign trail the president-elect often made anti-Mexican promises including a pledge to remove undocumented immigrants, build a border wall and tear up a long-standing trade deal.

Despite the rally ON Thursday, Daisuke Karakama, market economist at Mizuho Bank, sounded a note of caution.

He said that while there is talk Trump's plans for large fiscal spending and tax cuts could boost the economy and dollar, that was only the positive scenario.

"There are no resources to finance his tax cuts and there was no guarantee that he could get along with Congress given the divide between him and mainstream Republicans," he told AFP.