Investors warn of "unprecedented political risk" after Donald Trump's victory

The 45th President could rip up international trade agreements. 


Sign Up

Get the New Statesman's Morning Call email.

The UK's major stock market indices in the UK have bounced back this morning after a conciliatory speech by the President-Elect, Donald Trump. 

But while the initial shock may be over, investors remain jittery about Trump's actions on the world stage. 

The FTSE 100 plunged when it opened at 8am, but has since recovered, while the FTSE 250 followed a similar trend. 

But Japan's Nikkei 225 slumped overnight and stayed in the doldrums until close, and the dollar lost value on international currency markets. 

While investors are nervous about the unpredictability of President Trump, and his protectionist policies, they may be calmed by his promise to spend on infrastructure.

The US economy is also affected by the decisions of the independent central bank, the US Federal Reserve.

Nevertheless, Dominic Rossi, chief investment officer at the fund house Fidelity, said: "We are heading into a world of unprecedented political risk which calls into question the pillars of the post WWII settlement."

Shaun Port, the chief investment officer of the consumer investing platform Nutmeg, predicted that Trump's protectionist stance will trigger a sell off in emerging markets. The Mexican peso has already depreciated.

He said: "We're concerned about Trump's impact on global trade and agreements on foreign policy - this is where he's likely to cause most damage."

Julia Rampen is the digital night editor at the Liverpool Echo, and the former digital news editor of the New Statesman. She has also been deputy editor at Mirror Money Online and worked as a financial journalist for several trade magazines.