Did that just happen? | Calamatta Cuschieri

Turbulence in financial markets calmed on Wednesday after a selloff in stocks and rally in haven assets dominated morning trade. With the exception of Asia, global markets were mixed, as the world began to digest Donald Trump’s unexpected victory over Hillary Clinton to become the 45th President of the United States.

Markets rebound

The FTSE 100 turned higher after starting the day in the red, led by gains in basic materials, healthcare and industrial shares. But consumer goods and utility shares were among those that lost ground. The index opened lower after futures dropped more than 3% as Trump started to rack up wins in several key battleground states, such as Florida and Ohio. But stocks started to pare losses after Trump’s conciliatory tone in his address to supporters in New York.

Meanwhile, US equities traded mixed on Wednesday. The Dow Jones Industrial Average chopped around the flat line in early trade after opening lower, with Caterpillar contributing the most gains. The S&P 500 traded about 0.1% lower after trading marginally higher, with healthcare rising 2% to lead advancers, while real estate and utilities dropped 2.6% and 3.4%, respectively.

The potential winners…

Investors were sorting through which sectors may emerge as winners and losers under a Trump administration. During his victory speech, Trump spoke about launching infrastructure-related projects. This sent shares of building material suppliers soaring. CRH plc surged 8% as the US market makes up around 51% of its revenue.

Healthcare was up more than 4%, with analysts stating that a Trump victory supports the pharmaceutical sector, given that drug pricing reforms proposed by Hillary Clinton are unlikely to materialise. Shares of Pfizer were among the biggest gainers, jumping 6.7%.

Basic resources and construction stocks were also seeing gains on strong economic data out overnight from China.

But solar stocks were selling off during the session, as investors contemplated how Trump’s presidency would impact renewable energy. Guggenheim Solar tumbled 5.4% in pre-market trade alone, and First Solar was down 6% ahead of the bell.

GoPro, Sainsbury’s and Burberry struggle

In company news, shares of GoPro tumbled on Wednesday after the company said it will be recalling about 2,500 of its new Karma drones. In a couple of cases, GoPro drones have been reported to have lost power unexpectedly, the company said in a statement. Thankfully, no injuries or property damage have been reported, and owners can return the units for a full refund, GoPro said. Shares fell as much as 10% on the news.

Sainsbury's also struggled on Wednesday after it announced concerns over rising inflation after reporting a pre-tax profit drop of almost 10% to £372 million in the first six months of 2016. Shares were down 6% in early afternoon trade.

Likewise in the red, Burberry announced a 40% drop in first-half profits, as costs rose. Shares were down 2% during Wednesday’s session.

This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investments Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.