Dow Jones closes at all-time high

Traders on New York Stock Exchange floor Image copyright Reuters

US financial markets appear be embracing Donald Trump's election with the Dow Jones closing at an all-time high and the S&P500 also edging up.

Hopes that Mr Trump will introduce a pro-business agenda have blunted earlier concerns about his win.

Stock traders sought out firms standing to gain from his presidency, with American banks among the winners.

But shares in some of the biggest tech firms took a hit, pulling the Nasdaq index into negative territory.

The Dow Jones ended the day 1.17% higher at 18,807.88 points, while the S&P 500 index rose 0.2% to 2,167.48 points.

Investors have shifted to a focus on Mr Trump's priorities, including tax cuts, an increase in defence and infrastructure spending, and bank deregulation.

Bank shares, buoyed by hopes that Mr Trump will relax financial regulation, were among the biggest Wall Street gainers.

But the Nasdaq index, which has a large number of technology stocks, finished down 0.81% at 5,208.80. Apple, Amazon, Google and Facebook shares all took a hit.

Analysts said tech companies would be hurt by any trade barriers brought in by Mr Trump, and would not benefit as much from his plans for lower taxes and higher infrastructure spending.

"Tech has the most important export exposure of any sector, so there are some fears of rising trade barriers that would hit tech pretty meaningfully," said Mike Bailey, director of research at FBB Capital Partners.

'Markets volatility'

In Europe, the FTSE 100 closed lower after a rally which took it near the 7,000 level ran out of steam. The UK index finished down 1.2% at 6,823 points.

Germany's Dax and France's Cac indexes, which had earlier been more than 1% ahead, each closed about 0.2% lower.

Mark Dampier, analyst at Hargreaves Lansdown, told the BBC that some investors were taking profits. He forecast continued volatility as the markets digested what a Donald Trump presidency would mean.

But Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: "Perception now is that the controversial multi-billionaire TV presenter and property mogul could be good for business; and talk of tax cuts and heavy spending on infrastructure would certainly be good for growth."

CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Mr Trump's rhetoric during the campaign "was a sales pitch rather than a commitment to act".

Image copyright Getty Images

Earlier, Asia's markets had continued the stock market rally that gathered pace on Wednesday. Japan's Nikkei index closed up 6.7%, more than recovering losses from the previous session. Hong Kong's Hang Seng closed 1.9% higher.

On the currency markets, sterling rose 0.8% against the dollar to $1.2514, and was up 1.2% against the euro at €1.1507.

Traders had expected Hillary Clinton to beat Mr Trump to become the next US president. His victory initially sent money flowing into stocks that were deemed to be safer, as well as traditional haven assets such as gold and currencies including the yen.

"Investors were risk averse yesterday, then after seeing that Americans were optimistic and chasing the market higher, they wasted no time reversing their positions," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.

And Nariman Behravesh, chief economist at IHS Markit, said that "after the initial shock, investors seem to feel that a Trump administration could be good news for US businesses, with lower taxes and a reduced regulatory burden".

He added that while Mr Trump had set out several broad economic policies, including corporate tax breaks and the renegotiating or scrapping of trade deals, there was no certainty these would go ahead.

"As in the past, it is unclear how much of the campaign bluster will translate into actual policy initiatives."

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