By Sinead Carew
New York (Reuters) - U.S. stocks on Wednesday clawed back the losses suffered overnight as investors digested Donald Trump's surprise win in the U.S. presidential election, while the Mexican peso was battered.
After sharp declines in U.S. stock futures and in Asian shares overnight as the election results became clear, many money managers had braced for sharp declines when Wall Street opened.
But U.S. stock prices were buoyed as investors piled into healthcare stocks, a sector that had been slammed ahead of the election by the prospect of stiffer regulations from a Hillary Clinton presidency.
Mexico's peso recovered some ground after falling to a record low. Trump's threats to rip up a free trade agreement with Mexico and tax money sent home by migrants to pay for building a wall at the shared border have made the peso particularly vulnerable.
The market also recalled that the market's decline after Britain voted in June to leave the European Union was short-lived and was ultimately seen as a buying opportunity.
"This is much bigger than Brexit," said Nicholas Colas, Chief Market Strategist, Convergex in New York. "But it doesn't prevent people from thinking about the Brexit playbook."
The emergence of a clear winner in the presidential race may also help stocks as it removed some uncertainty, Colas added.
Still he predicted volatile equity markets until year-end as the world waits until January's inauguration for more concrete details of what a Trump presidency means.
At 10:07 a.m., the Dow Jones industrial average was up 27.46 points, or 0.15 percent, to 18,360.2, the S&P 500 had lost 1.52 points, or 0.07 percent, to 2,138.04 and the Nasdaq Composite had dropped 11.26 points, or 0.22 percent, to 5,182.23.
Pledges by Trump in his victory speech that he would forge strong relations with other big nations helped ease some concerns of heavy tariffs being slapped on selling to the United States and a starkly more aggressive geopolitical attitude. [nL1N1DA0T6]
UNCERTAINTY
Safe-haven assets like sovereign bonds, the Japanese yen and gold gave back some ground after having surged in the Asian session.
Emerging markets bore the brunt of the impact of Trump's victory, with Mexico's peso still down 9.2 percent after falling more than 13 percent to hit a record low overnight. [EMRG/FRX]
European stocks were up 0.85 percent after having fallen as much as 2.3 percent. In comparison the index fell 9 percent after the Brexit vote in June.
Asian stocks, which had closed before Trump's victory speech spoke of the need to strengthen the United States and maintain global relations, showed the day's biggest dents.
MSCI's broadest index of Asia-Pacific stocks outside Japan had ended down 2.3 percent and the Nikkei in Tokyo closing down 5.4 percent. It lost almost 9 percent after the UK Brexit vote.
Long-dated U.S. Treasury bond yields struck multi-month highs, reversing earlier falls as the initial market shock appeared to ease.
Benchmark 10-year yields initially fell to around a one-month low of 1.716 percent before sharply rebounding to hit 1.93 percent, up 6 basis points on the day at their highest level since late April.
In commodity markets, safe-haven gold saw huge swings. It was still up 0.96 percent after climbing as much as 4.9 percent earlier in the day to $1,337.4 an ounce.
(Additional reporting by Marc Jones in London, Wayne Cole in Sydney; Editing by Pravin Char and Chizu Nomiyama)
Disclaimer: No Business Standard Journalist was involved in creation of this content
