NEW YORK: Stock markets spiraled downwards around the globe as investors fretted over the rising chances that maverick tycoon Donald Trump could win the US presidency in next week’s election.
Leading equity markets in Asia and Europe tumbled more than one percent on Wednesday, while the broad-based S&P 500 also pulled back, along with the dollar. Gold prices, seen as refuge in times of uncertainty, continued to climb, adding 0.8 percent to $1,297 an ounce.
“With less than a week to go, market opinion is coming to the conclusion that a Trump win would create too much uncertainty and is bad for risk sentiment generally,” said Societe Generale analyst Kit Juckes.
Leading political observers still view Democrat Hillary Clinton as the front-runner to win the November 8 vote, in part because she enjoys leads in many of the key swing states that will determine the election.
The former secretary of State is considered by most investors to be a safer, more stable bet than Trump, who is seen as a loose cannon.
But polls have showed Trump gaining ground over the last week, a shift from mid-October, when Clinton’s sizeable lead seemed to assure her victory.
Some investors see the potential for a shock result akin to Britain’s June vote to exit the European Union, which was not foretold by opinion polls.
“The Trump risk is in revival,” said Chihiro Ohta, a Tokyo-based senior strategist at SMBC Nikko Securities Inc.
“With Trump, there always follows an uneasiness over whether policies will be managed properly in the US.”
Equity markets in Tokyo, Hong Kong, London, Paris and Frankfurt all fell between 1.0 and 1.8 percent on Wednesday. In the US, the S&P 500 shed 0.7 percent, in part due to weakness in petroleum-linked shares after a big jump in US oil inventories revived fears about a supply glut.
Early voting offers clues
More than 27 million people have already voted in the US presidential election, and early trends are offering some hints of the outcome less than a week before Election Day.
Six days before the election, voters had cast 6.7 million more early ballots compared to the same period in 2012, the data analytics firm Catalist said.
The numbers hold both good news and bad for Clinton as she battles Trump in a tightening final dash for the White House.
Early voting tallies indicate Democrats are turning out in greater numbers than Republicans in some states, an advantage for Clinton, experts say.