Wall Street smashes records, dollar soars as Trump wins

The Republican candidate made a stunning political comeback as he defeated Vice President Kamala Harris to return to the White House, four years after losing it to Joe Biden.

All three major US indices finished at records, led by the Dow, which soared 3.6 percent.

"The rationale behind the US stock market rally is that Trump is seen as business-friendly and will be able to pass his tax cuts through easily without much resistance from the Democrats who have lost control of the Senate," said City Index and FOREX.com analyst Fawad Razaqzada.

"The reaction today is just the fact that it was a clean sweep ... winning the election, the electoral vote, the popular vote, the Senate, and looking like they'll retain the House as well," said Aaron Clark, equity portfolio manager at GW&K Investment Management. "The market's clearly on a sugar high."

Markets are also applauding the clarity of Tuesday's results, said Jason Schenker of Prestige Economics.

"A swift and decisive outcome reduces the risks of protracted uncertainty, political violence, recession risks, and even geopolitical spillover that could have accompanied presidential election outcome uncertainty," he said.

Among the biggest winners were financial heavyweights expected to prosper from regulatory relief and private prison stocks, which stand to garner new business from Trump's expected crackdown on immigration. The losers included renewable energy companies.

In a sign that investors are also nervous about the impact of Trump's protectionist policies, European stock markets gave up strong earlier gains to slip into the red. Frankfurt fell 1.1 percent with shares in automakers -- a possible target of Trump tariffs -- slumping.

Asian stocks diverged, with Chinese stocks hit by expectations that Trump would impose tariffs on Chinese imports.

Market focus was also on plans to stimulate China's economy, the world's second biggest after the United States.

Trump tax cuts, while good for corporate profits, are seen as inflationary and therefore leading to fewer interest-rate cuts by the Federal Reserve in the coming months.

That boosted the dollar against main rivals, with the greenback up nearly two percent against the euro.

The Fed announces its latest rate decision on Thursday.

"With the Federal Reserve expected to announce a likely 25 basis-point cut tomorrow, we are already seeing expectations reined in for the December meeting given the perception that Trump's policies are inherently inflationary," forecast Joshua Mahony, analyst at traders Scope Markets.

Shares in Tesla soared 14.8 percent after Trump praised the electric car maker's boss Elon Musk, a key campaign backer, as a "star" during his victory speech.

Bitcoin record

Bitcoin sprung $6,000 higher to a record above $76,000 topping its previous peak of nearly $74,000 in March.

Trump has pledged to make the United States the "bitcoin and cryptocurrency capital of the world" and to put tech billionaire Musk in charge of a wide-ranging audit of governmental waste.

Elsewhere, oil prices  edged lower "amid expectations that under Trump more crude will flow from US wells", Streeter added. The main US contract WTI later erased its losses while international reference Brent was modestly lower.

"Another Trump presidency is likely to place emphasis on energy independence and his policies are likely to favor fossil fuels, promoting deregulation in the oil, gas, and coal industries," she said.

Key figures around 2150 GMT

New York - Dow: UP 3.6 percent at 43,729.93 (close)

New York -S&P 500: UP 2.5 percent at 5,929.04 (close)

New York - Nasdaq Composite: UP 3.0 percent at 18,983.47 (close)

London - FTSE 100: DOWN 0.1 percent at 8,166.68 (close)

Paris - CAC 40: DOWN 0.5 percent at 7,369.61 (close)

Frankfurt - DAX: DOWN 1.1 percent at 19,039.31 (close)

Tokyo - Nikkei 225: UP 2.6 percent at 39,480.67 (close)

Hong Kong - Hang Seng Index: DOWN 2.2 percent at 20,538.38 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,383.81 (close)

Euro/dollar: DOWN at $1.0732 from $1.0930 on Tuesday

Pound/dollar: DOWN at $1.2880 from $1.3042

Dollar/yen: UP at 154.62 yen from 151.62 yen

Euro/pound: DOWN at 83.30 from 83.80 pence

West Texas Intermediate: DOWN 0.4 percent at $71.69 per barrel

Brent North Sea Crude: DOWN 0.8 percent at $74.92 per barrel