Top Trumps: European stocks to watch around US election results
LONDON, Nov 8 (Reuters) - Below are nine stocks to watch as results emerge from Tuesday's U.S. presidential election, as identified by investment banks and brokerages including Barclays, Societe Generale, Deutsche Bank and Credit Suisse.
A winner should emerge from the contest between Democratic Party candidate Hillary Clinton and Republican Donald Trump before European markets open on Wednesday morning.
In recent weeks, expectations of a victory for Clinton -- seen as a known quantity with less uncertainty in her policy positions -- have encouraged investors to buy riskier assets.
"On this basis, the near-term reaction to a Clinton win should see sectors such as energy, telcos, financials, materials and tech benefit," Barclays analysts said in a note.
A Trump win, however, "would benefit staples, utilities, healthcare and industrials," all seen as defensive investments.
A rise for Trump in opinion polls hit global stock markets last week, with the S&P 500 posting its longest daily losing streak for more than 35 years.
Below are some trade ideas for stocks that will benefit from a Trump victory, from a Clinton victory, or where the picture is more complex.
TRUMP WINNERS/CLINTON LOSERS
* ACTELION - Pharmaceuticals have been inversely correlated with the chances of a Clinton presidency, as she has proposed higher regulation of pricing in the sector. Even if political pressure remains on the sector with a Trump win, it is a defensive sector which benefits in times of uncertainty. Barclays picks out Actelion as it derives 50 percent of revenues from the United States.
* FRESNILLO - Gold miners are safe-haven plays which benefit in times of uncertainty. Fresnillo is in addition a Mexico-based, London-listed, dollar-earning company. As such it benefits when the Mexican peso falls, as it has done whenever the chances of a Trump presidency have increased.
* BAE SYSTEMS - Trump's non-committal stance on supporting NATO allies might prompt increased defense spending in Europe should he win. Societe Generale picked out BAE Systems as a stock that could benefit, and say that the sector is at a 5 percent discount to the European market and a 20 percent discount to the U.S. defense sector.
CLINTON WINNERS/TRUMP LOSERS
* PRUDENTIAL - Analysts at Barclays and Societe Generale say a Clinton victory would lead investors to price in a U.S. Federal Reserve rate hike in December. That will help financial firms like insurer Prudential, which has 42 percent revenue exposure to the United States.
* BBVA - BBVA is identified by Credit Suisse and Societe Generale as the European bank most exposed to Mexico, from where it derives around 30 percent of its revenues. The stock would suffer if Trump got into power and scrapped the North American Free Trade Agreement, as he has pledged to do. Watch out for Banco Santander too.
* LUXOTTICA - Analysts at Barclays link a Trump win with dollar weakening and fears of an economic slowdown in the United States. They picked out luxury retailer Luxottica as exposed, because it derives 58 percent of its revenues from the United States.
* ASHTEAD - Ashtead is identified by Deutsche Bank as the European firm with the highest exposure to increased infrastructure spending in the United States, with 84 percent of its revenues derived there. Both candidates have pledged to increase infrastructure spending. Deutsche Bank highlights it as a sector to watch if Trump is victorious, whereas Societe Generale favors the sector if Clinton wins.
* CRH - CRH is a construction firm that would also benefit from any increase in U.S. infrastructure spending, as it derives 50 percent of its revenues from there. Barclays picks it out as a stock to benefit from a Trump victory, but Clinton has also pledged to spend more on infrastructure.
* BARCLAYS - Analysts at Credit Suisse say Clinton has a more hawkish stance on regulating big banks than Trump, who might come close to dismantling the Dodd-Frank act. But the implications of a Trump win for economic growth, especially if an expected U.S. rate hike is delayed, could hurt dollar earners like Barclays, even if less regulation in the United States would at first glance seem to benefit them.
(Reporting by Alistair Smout; Editing by Catherine Evans)