Written by Shashwat Chauhan
(Reuters) – European shares jumped nearly 2% on Wednesday, following a rise in U.S. stock futures, as Donald Trump claimed victory in the presidential election and Republicans controlled at least one chamber of Congress.
Fox News has declared that Democrat Kamala Harris has won, although other news outlets are yet to call the race.
The pan-European added 1.7%, on track for its biggest one-day advance so far this year.
Futures tracking jump more than 2%. Trump has already won the swing states of North Carolina, Georgia and Pennsylvania and is leading in several others, according to Edison Research.
Jochen Stanzl, chief market analyst at CMC Markets (LON:), Germany, said the jump resulted in more buying of European funds.
“We hope that not everything will be as bad as it could be in Europe and Germany in terms of what Trump is going to do.”
The famous ‘Trump Trades’, stocks that could benefit or be under pressure if Trump takes the White House, were going on Wednesday.
“Investors have been holding off (recently) on the Trump trade, but they’re fully into it now,” added CMC Markets’ Stanzl.
Trump is considered a bullish on European defense stocks, given his warnings to scale back US military support in the region and force NATO members to spend 2% or more of their GDP on defense.
An index of European aerospace and defense companies jumped 2.7% to a record high.
Shares of European renewable energy companies have come under pressure. Trump vowed to scrap offshore wind projects by executive order on his first day in office.
Oersted and Vestas fell 8.7% and 6.8%, respectively, while the general utilities sector fell 0.8%.
The STOXX volatility gauge fell to its lowest level since September 27. It kept it at 16.5 points.
Among other earnings-driven moves, Novo Nordisk (NYSE: ) jumped 8.4 percent after the weight-loss and diabetes drug maker reported better-than-expected quarterly sales of its popular Wegovy weight-loss drug and cut its 2024 outlook.
BMW (ETR: ) fell 3.7% after the German automaker reported a 61% drop in its third-quarter profit, missing analyst expectations.
Decisions by the US Federal Reserve and the Bank of England are expected later in the week.
Trump’s policies on immigration, taxes and tariffs are generally seen as inflationary, which could push US interest rates higher.
