Dems elected, market crashes?
Nancy Pelosi's impact on the global economy
Daniel Drezner
It would seem that the markets ain't thrilled with the midterm elections:
"Global finance markets have wobbled on fears that a Democrat victory in the US Congressional elections could prompt less market-friendly policies in the world's biggest economy.
Investors watched nervously as jubilant Democrats seized power in the US House of Representatives for the first time since 1994 and edged closer to taking the Senate, pushing European and Asian equities lower and weighing also on the dollar.
European indices eased off fresh five-year highs struck the previous day, while Japanese shares tumbled by more than one percent, as investors also feared that a split in power in Washington would create legislative gridlock.
"The European market started slipping lower (on Wednesday) with the Democrats taking power from the Republicans, traditionally thought of as more business friendly," said Michael Davies, an analyst with the Sucden brokerage firm in London.
London's FTSE 100 index of leading shares slid 0.53 percent to 6,211.00 points, Frankfurt's DAX 30 index dipped 0.44 percent to 6,334.20 points and in Paris the CAC 40 index shed 0.47 percent to 5,412.18.
The DJ Euro Stoxx 50 index of top eurozone shares lost 0.41 percent to 4,055.98 points.
The US dollar meanwhile staged a slight retreat against the euro and the yen.
"Although the outcome of US elections is unlikely to have a huge effect on the greenback, there are many that argue that if the Democrats win control of the House of Representatives, this will lead to a rise in protectionist policies or to political deadlock that could slow reforms," Davies added."
It will be interesting to see how U.S. markets respond.
danieldrezner.com |
