An immediate repercussion of Donald Trump being elected as the 45th President of United States is the tumble in global financial markets.
According to The Washington Post, Wall Street witnessed three major stock indices plunge down 4 percent or more in pre-market trading, clearly indicating how unprepared the investors on Trump’s win.
Dow Jones Industrial Average futures fell 728 points or about 4 percent at 17,554, before regaining some ground. Standard & Poor’s 500 stock-index suffered a 4.6 percent loss with a fall of 97.25 points, reaching 2,038.
Meanwhile, the Nasdaq-100 futures also plunged down 220 points, or 4.5 percent, at 4,584. CBOE Volatility Index rose to a massive 40 percent due to the drop in US stocks, reports MarketWatch.
This state of vulnerable stock market condition was observed across Europe and Asia as well.
Under Asian markets, Hong Kong’s Hang Seng Index was down 646 points, or 2.8 percent, at 22,262. The Nikkei was off 697 points, or 4.1 percent, to 16,477. Australia’s all ordinaries index slide down 126 points, or 2.4 percent, at 5,216, Market Watch further states.
In Europe, the Stoxx Europe 600 index was off 0.7 percent after dropping 2.4 percent, states The Washington Post.
The Mexican peso, which has been a proxy for Trump, was down sharply against the dollar. It plunged over 11percent, to a record low of 20.30 pesos to the dollar.
The Gold prices shot up to $1,318 per ounce, when the futures increased 3.8 percent.
Many are comparing the win of Donald Trump and the stock market plunge with a similar event that happened across Europe- “Brexit”. Brexit or Britain Exit is when Britain decided that it doesn’t want to be a part of EU anymore and won this decision with majority votes.
The question remains on what to expect in future and how to deal with the uncertainties.
The Washington Post announced that according to Kang Byung-mo, head of financial market analysis at Korea Exchange, he said that although they haven’t taken any measures regarding the plunge, but they are keeping a strict eye, monitoring the markets closely.
“Trump has not held any public office before and lacks the experience of making currency and fiscal policies. He also has extreme views,” said Yang Delong, chief economist at First Seafront Fund in Shenzhen. “All these will be viewed by the investors as huge uncertainty. That’s why the markets are down and the gold price is going up.”
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