European stock markets rallied in the past two days as money managers placed strong bets on a clear win for Joe Biden, followed by huge government stimulus for the US economy.
That complacency has been pierced after Donald Trump won some crucial battleground states including Florida, claimed victory prematurely and threatened to go to the Supreme Court.
In opening trades, the Stoxx 600 regional benchmark fell 0.9 per cent and London’s FTSE 100 dropped 1 per cent.
The European banking sector — which fund managers believed would benefit from a Biden victory that involved higher US government borrowing and a knock-on rise in Treasury yields — is trading 3 per cent lower.
Oil and gas shares are also down more than 3 per cent, on average.
Banks and energy stocks are so-called value shares, given their high dividend yields, that fund managers had been buying in recent days because such stocks tend to benefit from strong economic growth.
With Mr Biden’s forecast lead having faded, the future of his multi-trillion dollar stimulus plans is in doubt.