Europe open: Stocks surge as risk appetite returns following US elections

6th Nov 2024 07:56

(Sharecast News) - European stock markets rallied on Wednesday morning in the aftermath of the US presidential elections, with Donald Trump already declaring a "magnificent victory" in the race against Kamala Harris to the White House.

While votes are still being tallied, Trump looks set to win the majority of votes, taking the swing states of Pennsylvania, North Carolina and Georgia. The Republican Party is also set to take control of the Senate.

"I want to thank the American people for the extraordinary honour of being elected your 47th president and your 45th president," Trump said in a speech to supporters in Florida in the early hours of the morning. "America has given us an unprecedented and powerful mandate."

By 0949 CET, the Stoxx 600 index was up 1.7% at 518.31, with mild losses in Madrid (-0.8%) outweighed by big gains in London (+1.4%), Frankfurt (+1.5%), Milan (+1.2%) and Paris (+2.1%).

Wall Street futures were pointing to huge gains ahead of the opening bell, with the Dow rising 2.6% and the S&P 500 up 2.2%.

Over in Europe, companies with heavy exposure to the US market were performing well early on, such as London-listed equipment rental firm Ashtead, hotels group InterContinental and building materials provider CRH.

"Trump has declared victory on stage in Florida, it's a little premature, but he is only 4 electoral college votes away from winning, and there is no way for Harris to catch him at this stage," said Kathleen Brooks, research director at XTB.

"In the end, this was not a tight race, and it was wrapped up quickly. This has helped to boost risk sentiment on Wednesday, as it reduces the chance of civic unrest. The national opinion polls got this election very wrong. Even the market-based prediction polls had narrowed sharply in recent days, although they had consistently predicted a win for Trump."

In other equity news, UK housebuilder Persimmon was a heavy faller, dropping 5% after delivering 1,416 homes in the third quarter, slightly down from 1,439 last year. However, the company said it was still on track to hit full-year targets for housing completions this year.

Danish pharma giant Novo Nordisk surged after reporting a 24% increase in third-quarter sales, helped by demand for its diabetes and obesity treatments.

In economic news on Wednesday, the final reading of the October eurozone composite PMI was revised to 50 from a preliminary reading of 49.7, and up from 49.6 in September. Figures in Italy, France and Germany was all revised higher compared with earlier estimates.