Australian shares have recovered a little after being in free fall earlier in the afternoon but are still down heavily. The S&P ASX 200 index was down 2.2 per cent, wiping $36 billion from the value of shares as the prospect of a Trump victory loomed large in the US presidential election.

Earlier the market was down a massive 3.6 per cent, pushing valuations down $46 billion at that point.

US stock markets are also roiling as Mr Trump’s prospects improved as counting progressed. US futures markets are pointing to a steep fall as investors express deep pessimism.

Futures for the Dow Jones Industrial Average plunged more than 450 points before paring losses, as Mr Trump beat Democrat Hillary Clinton in the battleground states of Florida, Ohio and North Carolina that will decide the election.

Dow futures were off 414 points, or 2.2 per cent, at 17,883.

The U.S. dollar  slumped 2.4 per cent to ¥102.48. The ICE U.S. Dollar index, a measure of the dollar’s strength against a basket of six rivals, was off 0.7 per cent at 97.1880.

The UK pound rose 0.78 per cent against the greenback, trading at £0.8026 pence agains the US dollar while the Euro was slightly weaker at €0.909 against the greenback.

In Australia, the stock markets opened higher, up around 0.7 per cent.

But mid-afternoon this had reversed with the market down 2.2 per cent.  The S&P/ASX 200 index was down 115.1 points, to 5142.6 points.

Australian government bond yields reacted strongly with yields rising by 10 basis points to 2.24 per cent. That signals that investors are seeking safety as the share market falls.

The Australian dollar also made a quick and powerful reversal as election sentiment moved towards the likelihood of a Trump victory.

At noon (AEDT) on Wednesday, the local unit was trading at US77.68 cents, up from US77.04c on Tuesday, at what was its highest level since late April. However, by 1pm (AEDT) the exchange rate had slid back to US77.24c.

Gold, seen as a safe haven in uncertain times, was up 2.5 per cent at $US1305.10 and ounce, while US Treasury bond yields fell 11 basis points to 1.741 per cent with investors seemingly moving from shares into bonds in search of security.

Markets had risen in Europe, Asia and the US prior to the polls closing as investors bet on a Clinton victory which many saw as a “business as usual” outcome.

CMC market strategist Ric Spooner said traders generally take the view that a Trump win is bad for shares.

“Rightly or wrongly, markets are going to be concerned about a Trump victory, particularly given the potential consequences for world trade and its impact on many large companies in the US stock market,” he said.