The Australian share market has rebounded strongly upon opening this morning, despite the volatility that erupted across global markets as the US election result unfolded.
The Australian dollar rose from lows of about US75.85 cents to about US77 cents, and was at US76.55 cents at the US close. The Australian market was up about 147 points at the beginning of trade.
The Australian share market lost about $34bn in value on Wednesday as the election counts came in. Despite an upheaval that saw the the stock market slump by almost 4%, it recovered to finish just 1.9% lower.
Juliana Roadley, a market analyst at CommSec, said: “Unfortunately, we were opening as polls were closing so we felt the brunt of the volatility in the market.
“What we’ve seen overnight is a bit more calm coming back into the markets.”
In a statement on Thursday morning CommSec said global oil prices had rebounded from lows as equities markets rose on the expectation of greater US public spending.
“In Asian trade, futures markets had suggested an 800-point fall by the Dow Jones index at the open of trade,” it said. “Industrials rose on expectations for increased infrastructure spending. Pharmaceutical stocks rose on expectations of a stable regulatory environment.”
Marcus Padley, the director of financial services company MTIS and the author of stock market newsletter Marcus Today, told ABC News 24 on Thursday morning that international recognition of the Trump presidency could be the reason global markets had bounced back.
“The moment he has got in, all that campaigning staff has started to evaporate and he has started to build credibility,” Padley said.
“His own speech was almost presidential. Then you have Obama and Clinton filing in behind him. All the international leaders have filed in behind him with shows of support. You even had an open letter from 1,100 large companies including people like Boeing saying they would work with the administration.
“Everybody wants him to succeed. I think his maverick personality won’t be allowed to dominate policy. I think the markets have come back because they’ve realised, actually, in the same way as Ronald Reagan was an entirely inappropriate-looking appointment, Arnold Schwarzenegger as well – it is a show.
“Trump’s in. He is not stupid. He is a businessman.”
