Trade fears and market volatility emerge following Donald Trump's election victory

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Global markets have reacted with volatility following Donald Trump's shock victory in the US presidential election.

International businesses and global markets have reacted with alarm and concern to the news that Republican candidate Donald Trump has won the US presidential election.

Mr Trump, considered a rank outsider in the presidential race when he first announced his candidacy in June 2015, has defied the polls by emerging victorious over his Democratic rival Hillary Clinton after a tightly-contested and bitterly-fought election campaign.

News of the shock result has created considerable anxiety among global investors and trading partners, as the politically inexperienced president-elect has stoked conflict during his campaign and expressed a number of strong protectionist sentiments, leading to fears his presidency will be damaging to the international free trade agenda.

Immediate consequences of the election news included a sharp drop in the value of the US dollar and Mexican peso, a five per cent decline for Japan's Nikkei index, a 130-point slump for London's FTSE 100, and a rise in the price of gold to more than $40 (€36.04) an ounce.

The impact was similar to the market and currency slump seen after the UK voted to leave the European Union earlier this year, defying expectations of a result in favor of remaining. However, many of these latest losses have stabilized following Mr Trump's acceptance speech, which took a more conciliatory and internationalist tone than his campaign rhetoric.

Since Mr Trump spoke, the FTSE 100 index recovered its losses and resumed flat trading, while the US dollar regained a position only slightly lower against the euro. Nevertheless, concerns remain that a Trump presidency may have a negative impact on global trade.

Jeremy Cook, chief economist at money broker World First, said: "The great unknown is the economic policy, based around a trade war with Mexico - its third largest trading partner - and China, its biggest trading partner. Brexit was about UK instability; Trump is about global instability."