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Category: Markets / US Elections / Stockmarket

Banks, healthcare lead post-election rally on Wall St

Thursday, 10 Nov 2016 03:38:03

Donald Trump delivers his victory speech (AP/Evan Vucci)

US stocks have rallied in a dramatic turnaround from overnight losses fuelled by the upset victory of Republican Donald Trump, as investors poured into sectors that appeared poised to benefit from the policies of a Trump presidency.

Markets oscillated between gains and losses in choppy morning trade.

Heading into the latter stages of trading, each of the three major stock indexes were solidly in positive territory in the wake of Mr Trump's win.

Gains of 3 per cent each in the heavily weighted healthcare and financials sectors pushed indexes higher.

Bond proxy sectors such as real estate, down 2.2 per cent, and utilities, each off more than 2 per cent, were the worst performers.

"When you look at Trump's plans, they are actually pro-market," Nadia Lovell, US equity strategist at JP Morgan private bank in New York, said.

"Increased fiscal spending, that's great for infrastructure and defence names, less regulations that help banks, less involvement in healthcare — things that worried the market before."

Mr Trump's plans are reflationary policies, intended to increase economic output by lowering taxes and boosting spending.

A curb on drug pricing was a key campaign theme for Democratic nominee Hillary Clinton, while Mr Trump has called for repealing the Affordable Care Act and loosening restrictions on banks enacted after the financial crisis.

The Dow Jones industrial average rose 182.57 points, or 1 per cent, to 18,515.31, the S&P 500 gained 16.79 points, or 0.78 per cent, to 2,156.35 and the Nasdaq Composite added 28.93 points, or 0.56 per cent, to 5,222.42.

Through the night, financial markets had reacted violently to the election results as Mrs Clinton's path to victory narrowed.

The S&P futures slid 5 per cent and hit a limit down, meaning the contract could not trade lower, only sideways or up. Dow Industrials futures briefly fell 800 points.

Reuters

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