US midterm elections: How the markets reacted

Global markets have rallied as the dollar weakened following the US midterm elections.

The Democrats took control of the US House of Representatives, which could make it harder for Donald Trump to push through his legislative plans.

But the Republicans retained their control of the US Senate, in a largely expected outcome.

The pound has gained 0.5 per cent on the dollar, climbing to a three-week high of $1.316 and the euro also rose 0.5 per cent to $1.149, it's highest this month.

The FTSE 100 climbed 1.1 per cent in early trading as the weakening dollar boosted the mining sector – Antofagasta, up 3.7 per cent and Anglo American, up 3.3 per cent were among the biggest risers, while Rio Tinto and BP shares also jumped.

European markets also rallied following the election results, with the German DAX rising 1.2 per cent and the French CAC also up 1.4 per cent.

“A decline in the dollar following the US midterm elections has given a welcome boost to the mining sector as it will be cheaper for many foreign companies to buy dollar-denominated commodities,” AJ Bell analyst Russ Mould said.

Dow Jones futures also rose this morning as did S&P 500 futures.

“This is the outcome that financial markets expected so they've barely reacted,” James Athey from Aberdeen Standard Investments said.

“Markets will move quickly to speculate on how this result may embolden Trump's foreign policy, since it's the most obvious area where he can operate largely without congressional support.

“Their focus will probably be on this month’s G20 summit for signals of which way he’ll turn now on the trade war with China, or indeed how willing China might now be to return to the negotiating table,” he added.