LONDON, Nov 9 (Reuters) - Shares in London-listed banks and wealth managers fell on Wednesday after Republican party candidate Donald Trump romped to a shock victory in one of the most unlikely United States presidential races seen in living memory.
Europe’s largest lender HSBC saw its stock slide by 2.8 percent as trading began, as investors fretted about its interests in the U.S. and Mexico - where the value of the peso has dropped to a record low versus the dollar - and the economic damage posed by a vast border wall the president-elect has vowed to build.
Shares in Asian-focused lender Standard Chartered fell 3.4 percent, while Barclays - which recently pledged to pursue a transatlantic strategy focused on the U.S. and Britain - slumped 3.7 percent.
“Any macro shock for an economy which is printing its lowest decile unemployment historically could lead to a sharp decline in earnings through higher risk,” analysts at Bernstein said in a note on Wednesday, adding that the result would prevent a Federal Reserve rate rise “anytime soon”, hurting HSBC and StanChart the most.
“It should also result in hits to investment banking earnings globally which are anyway going through rough times,” the note continued, flagging particular pain for Barclays.
British state-backed banks Royal Bank of Scotland and Lloyds Banking Group suffered falls of 3 percent and 3.5 percent respectively, helping to push the main European banking index down by 3.7 percent.
Celebrity property magnate Trump paved his way to the White House with a series of surprise wins in key states like Florida and Ohio, rattling world markets that had expected Democrat Hillary Clinton to defeat the political outsider in Tuesday’s U.S. election.
Investment managers running hundreds of billions of pounds in institutional and private wealth fared little better in shellshocked markets reminiscent of the morning after Britain’s vote to quit the European Union in June.
Money managers Schroders and Aberdeen Asset Management saw stock prices fall by 3.9 percent and 4 percent respectively, while shares in St. James’s Place fell 3.9 percent.
Europe’s largest listed hedge fund firm Man Group failed to buck the downward trend, with shares falling 2.3 percent shortly after market open.
“The extent of further fallout over the trading day today will depend to some degree on the rhetoric from Trump,” Derek Halpenny, European Head of Global Markets Research at MUFG said. (Additional reporting by Lawrence White, Simon Jessop and Ritvik Carvalho, editing by Rachel Armstrong)