Billions of dollars were wiped off financial markets yesterday and investors paid the price as they awaited the outcome of a US presidential election that is apparently much closer now.
Stock markets from Wall Street to Tokyo, which had been fairly stable over recent months, took a quick tumble yesterday after new US opinion polls raised the stronger possibility that Republican candidate Donald Trump might win next week.
Tokyo took it the hardest, sliding 1.8 per cent, while Hong Kong declined 1.5 per cent, Taiwan lost 1.4 per cent and Sydney fell 1.3 per cent.
Seoul, grappling with its own political crisis, dropped 1.4 per cent to its lowest level since July.
Singapore's benchmark Straits Times Index was the least affected, slipping just 6.55 points, or 0.2 per cent, to 2,807.14.
The European markets also opened lower across the board - with bourses from Spain to Germany sliding - and an index tracking volatility hit its highest since July.
The market believes a win by Democratic nominee Hillary Clinton would ensure stability, with very gradual changes to policy.
A Trump presidency, however, is seen by investors as being much more unpredictable.
An ABC News/ Washington Post survey showed Mr Trump with 46 per cent support among voters, pipping Mrs Clinton's 45 per cent.
That slight advantage in that poll - along with a tightening in other polls - was enough to spook the markets, which had been expecting Mrs Clinton, who has dominated most polls until recent days, to coast to the White House.
News last Friday that the FBI had reopened an e-mail-related probe has added more jitters, with many political pundits now saying that the Nov 8 election will be closer than they expected.
"A Trump presidency has higher uncertainty as his policies are more unpredictable," said Bank of Singapore investment strategist James Cheo. "A Trump win creates the possibility of Republicans controlling a larger portion of the legislation process, giving Trump the ability to make big changes. This uncertainty is unsettling for markets."
Columbia Threadneedle's US equity portfolio manager Nicolas Janvier put it in starker terms, saying a Trump presidency could spell big changes - and not necessarily good ones - for the United States and the global economy.
"Trump would likely interpret a victory as having a mandate from the general populace to push forward with some of the more radical, anti-establishment parts of his platform," he said. "Odds of an anti-free trade, anti-immigration policy regime taking hold in America under this scenario increase."
