Could share prices rally as a result of the political situation in the United States?
Barack Obama's victory in the US presidential election is likely to have a positive impact on global share prices, it has been suggested. According to Joshua Raymond, a market strategist at City Index, the jubilation felt by many American citizens last night could be reflected on the world's stock exchanges.
"The Obama effect has firmly gripped the markets this week and we expect this to continue," he remarked. "People dancing in the streets in the US sums up the good feeling generated from the overwhelming Obama victory and this good feeling and positivity is easily transferred into the markets. When we are positive, we are more inclined to buy and there is lots of positivity out there right now."
The Democratic candidate beat off competition from Republican John McCain to become the 44th president of the United States and the first African-American to take up the role. In his acceptance speech he referred to a "new dawn of American leadership" and insisted the challenges of tomorrow were the "greatest of our lifetime".
Nick Ford from the US desk at Scottish Widows Investment Partnership has also predicted something of a share price rally during the final months of the year following Obama's historic win. He pointed out that stock markets usually show approval when a new president is elected and insisted there is no reason why things should be different now, particularly given the "feel-good factor" that has engulfed America overnight.
Shares in Asia experienced strong gains on the news that Obama had won. However, the FTSE 100 dropped two percent on opening this morning.
