European stocks wobble as US election finally arrives

Virginia residents wait in line in the dawn hours to vote in the the 2016 US presidential election before the polls open at an historic property called the 'Hunter House' at Nottoway Park in Vienna, Virginia.
Virginia residents wait in line in the dawn hours to vote in the the 2016 US presidential election before the polls open at an historic property called the 'Hunter House' at Nottoway Park in Vienna, Virginia.PHOTO: EPA

LONDON (AFP) - Europe's main stock markets wobbled in cautious deals on Tuesday as election day arrived in the United States.

Frankfurt stocks edged higher, London teetered lower while Paris flatlined, as voting began in the presidential poll which pits Democratic frontrunner Hillary Clinton against Republican Donald Trump.

All three European markets had soared on Monday by close to 2 per cent in a global rally after the FBI cleared Clinton in an email probe.

Voters in nine states got first crack at electing the new president, with the rest of the country due to get started later in the day.

Polls opened at 6am (7pm Singapore time) in nine states, mainly in the east. The name of the winner was not expected to be known before 3am GMT (11am Singapore time).

There remains unease however, with maverick tycoon Trump having rallied from a double-digit deficit in some polls to within striking distance of Clinton, while analysts highlighted Britain's shock EU exit vote.

"Investors are still understandably reluctant to do much of anything on this electoral Tuesday," noted Spreadex analyst Connor Campbell.

"Looking ahead to the US open and the markets are in for more of the same." He added: "In terms of the election Clinton seems to have momentum on her side.

"She is the clear market-favourite. Of course, this was basically the situation for the Remain camp pre-referendum." Most Asian markets extended gains on Tuesday on hopes Clinton will beat Trump - but many opinion polls indicate the race is too close to call.

"Cautious investors adopt a wait-and-see policy as Election Day finally arrives in the United States," said Andy McLevey, head of dealing at stockbroker Interactive Investor.

"Having had their fingers burnt in the aftermath of the UK EU referendum, it is of little surprise many have paused for breath as despite polls signalling a Hillary Clinton victory seems likely it is still too close to call and we may see some jitters as the day progresses."

Global equities had surged on Monday after the FBI said it would not pursue criminal charges against Clinton over her use of a private email server while secretary of state, dealing a blow to Trump.

Monday's rally followed a week of turmoil sparked by the FBI's announcement on October 28 it was looking into the issue, despite having cleared her once already in July.

Clinton is considered by many investors to be a safer bet than Trump, who is seen as a loose cannon with policies many fear could wreck the world's top economy.

New York saw big gains on Monday where the S&P 500 ended a nine-day losing streak to rise 2.2 per cent, its biggest gain since March. The Dow and Nasdaq each finished more than two percent higher.

The Mexican peso was also enjoying continued buying interest, recovering the losses suffered last week. The unit is considered a reflection of Trump's chances because of his anti-Mexican rhetoric - including his pledge to remove undocumented immigrants, build a border wall and tear up a trade deal.