Markets have been plunged into turmoil after Donald Trump’s US election win.
The FTSE 100 had a rollercoaster ride as it opened 145 points, or 2% lower, wiping £37bn off the value of top UK-listed companies.
But it quickly recovered most of the losses to stand about 50 points lower.
The market opening coincided with Mr Trump’s acceptance speech in which he eschewed some of the more confrontational rhetoric deployed during the campaign.
Instead he put the emphasis on reuniting a divided America, putting millions back into work through large scale infrastructure projects, and dealing fairly with other countries.
Futures trading ahead of the London opening had been pointing to steep losses.
Asian markets sank overnight with Japan’s Nikkei 5% lower and Hong Kong’s Hang Seng off by 2%.
In Europe, Germany’s Dax and France’s Cac 40 fell about 2%, as did Spain’s Ibex. In Italy, the MIB was off nearly 3%.
The US dollar also sank while the Mexican peso plummeted by as much as 13% to a record low.
Investments seen as safe havens such as government bonds and gold, as well as the Japanese yen and Swiss franc, turned higher as the tide turned in Mr Trump’s favour, against initial expectations.
Jasper Lawler, market analyst at CMC Markets UK, said: “Markets are freaking out.
“President Trump said his election would be bigger than Brexit – and as far as financial markets are concerned, that is already true.
“Since the US is the world’s largest economy and the US dollar is the world’s reserve currency, it still holds true that when the US sneezes, the rest of the world catches a cold.”
Sterling was up by a cent against the US dollar overnight at $1.25 though it later slipped back to about $1.24.
In Tokyo, the Japanese government and central bank were preparing to meet for crisis talks.
Markets had been expecting a victory for Hillary Clinton and many investors fear a Trump White House would up-end the global political order.
Stocks have seen a rollercoaster ride over the last week with sharp falls as Mrs Clinton came under pressure over an FBI investigation followed by rallies when the ending of the probe had appeared to tip the scales in her favour.
Election day saw tentative gains as investors waited anxiously on the result but as voting projections swung in Mr Trump’s favour trading turned volatile.
Investors fear the Republican’s protectionist stance will lead into a trade confrontation with China while he is also expected to renegotiated the long-standing NAFTA free trade agreement with Mexico and Canada.
Plans for transatlantic and trans-Pacific trade deals now look dead, said Paul Ashworth, chief US economist at Capital Economics.
Meanwhile a series of unfunded tax cut plans would send Federal debt levels soaring, he added.
Kathleen Brooks, research director at City Index, said: “Markets are in all-out panic mode.”
She said investors were facing a “triple whammy” with the Republicans projected to take control of the US Senate and House of Representatives as well as the White House.
“A Republican Congress could deliver some of the more extreme policies that Trump has touted during his campaign, such as import tariffs and a ban on certain immigrant groups.
“This is a major concern for the markets, as it could completely change not just US politics, but also the global economic norm,” Ms Brooks said.
Meanwhile, the prospect of a US interest rate rise in December looked likely to fade in the event of a sharp and prolonged stock market downturn, she added. (Sky News)