Clinton-fuelled Stocks Rally Fades In Europe

LONDON, (APP - UrduPoint / Pakistan Point News - 27th Sep, 2016 ) : European stocks fell Tuesday on a fading rally triggered by Hillary Clinton's upbeat performance in the first US presidential debate over Republican rival Donald Trump.

The London stock market shed 0.3 percent, Frankfurt was down 0.9 percent and Paris pared 0.6 percent in value in afternoon deals, reversing early gains. "Declines in prominent German and Swiss banks have revived fears of a European banking crisis," said Jasper Lawler, analyst at CMC Markets.

"Stocks had opened moderately higher in a small nod to establishment candidate Hillary Clinton winning the US presidential debate." In Asia, indices closed with solid gains as a confident Clinton bested her rival in the 90-minute showdown.

"Whilst the debate was being aired, (gains for) stock futures and Asian markets... fed through to the London open with the FTSE 100 beginning brightly," noted analyst David Cheetham at brokerage XTB.

Tokyo ended with a gain of 0.8 percent after a near 1.0 percent drop at the open. Hong Kong jumped 1.1 percent and Shanghai won 0.6 percent. With six weeks until election day and polls showing a virtual dead heat, Clinton repeatedly questioned her rival's fitness to serve in the Oval Office.

As Clinton projected steady experience, Trump played the populist bruiser, pitching to frustrated blue-collar voters fed up with politicians. - Investors reassured - ======================= "A vote for Clinton is considered a vote for the status quo and markets will welcome sustained accommodating monetary policy under her administration," added Philip Capital UK economist Ana Thaker.

"The Federal Reserve came under criticism from Donald Trump over their reluctance to hike rates, with warnings that the economy could face difficulty when the Fed did eventually hike.

" On foreign exchange markets the haven Yen dropped, while emerging-market currencies surged as traders moved back into riskier assets.

The Mexican peso rebounded off a record low, rocketing over two percent to 19.4391 against the Dollar. The unit had slumped before the debate as the prospect of a Trump presidency fanned concerns over the neighbours' political and economic ties.

"The election in November is one of the biggest risk events facing the markets this year and the way markets responded to the first debate makes it clear which outcome is more favourable," said analyst Craig Erlam at traders Oanda.

"Clinton appeared to edge the first debate which has provided a lift for investors, albeit only a slight one as the polls remain extremely close and the campaign has a long way to go." He added: "The Mexican peso is particularly sensitive to the election and will likely remain very volatile over the next month or so." Trump has vowed to cut off billions of Dollars in remittances sent by migrants to Mexico to make their country pay for a massive wall along the border.

- Key figures around 1030 GMT - =============================== London - FTSE 100: DOWN 0.3 percent at 6,800.70 points Frankfurt - DAX 30: DOWN 0.9 percent at 10,298 Paris - CAC 40: DOWN 0.6 percent at 4,382.80 EURO STOXX 50: DOWN 0.6 percent at 2,958.50 Tokyo - Nikkei 225: UP 0.8 percent at 16,683.93 (close) Hong Kong - Hang Seng: UP 1.1 percent at 23,564.59 (close) Shanghai - Composite: UP 0.6 percent to 2,998.17 (close) New York - DOW: DOWN 0.9 percent at 18,094.83 (close) Euro/dollar: DOWN at $1.1247 from $1.1254 late Monday Dollar/yen: UP at 100.42 yen from 100.30 yen Pound/dollar: DOWN at $1.2957 from $1.2976