News Column

World Markets React Cautiously to Obama's Victory

November 7, 2012
World Markets

The world's financial markets reacted cautiously Wednesday to Barack Obama's re-election amid concerns that the challenges facing the president of the United States during his second term will continue.

While stocks in Asia ended the session mixed, the dollar slipped and Europe's bourses chalked up modest gains as investors focused on key US economic issues, notably Washington's efforts to deal with the nation's debt-and-deficit problems and job creation.

By late-morning trading, the benchmark Stoxx 50 share index had gained 0.7 per cent to 2577 points, with investors hoping that Obama's re-election will perpetuate the US Federal Reserve's policy of pumping fresh capital into the economy.

The dollar edged down on the news of Obama's victory, with the euro up 0.3 per cent at 1.2844 dollars during late morning trading in Europe.

Hopes that the US will boost stimulus measures sent gold up 0.6 per cent to 1.727 dollars an ounce.

After initially sliding following Obama's win, New York stock futures also pointed to the Dow Jones Industrial Average posting a slight gain when it opens later on Wednesday.

Wall Street had been among the strongest backers of Obama's Republican challenger, businessman Mitt Romney.

The rise in the Stoxx 50 index was reflected across major European bourses, with stocks in London, Frankfurt and Paris all gaining ground.

This came after Tokyo's Nikkei 225 index finished the trading day down 0.03 per cent. Stocks in Shanghai also closed down slightly, by 0.01 per cent.

However, stock markets in both Sydney and Hong Kong ended their trading sessions 0.71 per cent higher.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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