Investors should brace for a further slump in global stock markets, the U.S. dollar and most commodities if Republican candidate Donald Trump becomes the next U.S. president, as appeared increasingly likely on Wednesday.
Markets fear a Trump victory could trigger global economic and political mayhem, creating massive uncertainty for investors who had been counting on a win by Democrat Hillary Clinton, whose policies were seen as more staid but predictable.
"If current market moves hold or go further, there is likely to be quite a bit of de-leveraging and forced selling tomorrow," Mohamed El-Erian, chief economic adviser at Allianz, said as global markets skidded.
Trump has threatened to rip up major trade agreements and impose barriers in the United States on imports from countries such as Mexico and China, which could reduce trade flows and harm already sluggish global growth.
Jack Ablin, chief investment officer at BMO Private Bank in Chicago, forecast U.S. stocks could drop as much as 10% over the next 10 sessions if Trump is elected to the most powerful office in the world.
"Investors don't know what he (Trump) is going to do; the policies he's laid out have been vague and his demeanor is capricious.
"Foreign markets, particularly emerging markets, would take most of the brunt. These are markets that rely more on selling to us than us selling to them."
Market turmoil could also prevent the U.S. Federal Reserve from raising interest rates as expected in December.
As the chance of a Trump upset grew, global markets plunged, with some losses eclipsing the carnage seen after Britain's shock vote to leave the European Union in late June.
"Whatever the outcome, this is a horribly angry electorate," said Daniel Alpert, managing partner at Westwood Capital LLC in New York.
"The markets will tank and then, those around Trump who have reasonable minds will script him with some pablum for the markets and calm them.
"But that is not the issue. The issue is that he cannot fulfill the goals of those who are in his crazy inner circle and, at the same time, truly address the interests of those who have risen up against the Washington consensus."
Trump was leading Democrat Hillary Clinton in the Electoral College by a tally of 244-209 as of 04:40 GMT, with some key swing states still too close to call. A tally of 270 is needed to win.
The dollar, the Mexican peso and crude oil all plunged as Trump gained ground, with U.S. stock futures tumbling nearly 5%, likely wiping trillions of dollars of value off global financial markets, while traditional safe havens such as sovereign bonds, the Japanese yen and gold all rallied.
Emerging markets such as Mexico and companies related to them such as large U.S. stocks with global exposure are likely to bear the brunt of panic selling, investors forecast.
The MSCI Emerging Markets index plummeted 3.1%, its biggest one-day drop since the June 24 Brexit shock.
The Mexican peso is seen the bellwether for Trump's chances of a victory as his policies are damaging to Mexico's export-heavy economy. It plunged more than 13% to a record low as early projections put the maverick candidate with no political experience ahead.
"We'd probably see a selloff in riskier assets, in particular emerging markets assets, particularly the Mexican peso," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.
"We're seeing that play out right now and I suspect if you see a Trump win we'd be seeing a continuation of something like that."