The news that Hillary Clinton will not face criminal charges over her email server scandal was a major factor behind a big rise in share prices and the value of the dollar on Monday.
Stocks soared on both sides of the Atlantic, rising around around two percent by mid-afternoon in New York.
Wall Street reversed nine days of falls through to Friday – its longest losing streak in more than 35 years.
“Clinton is a known quantity and investors hate uncertainty and they are very happy even if taxes were to go up … In the case of Trump, it is uncertain as to what he stands for,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies.
The index of Europe’s top 600 shares closed up 1.5 percent on Monday.
Last week it recorded its largest weekly loss since February due to the tightening US election race.
Analysts at Deutsche Bank said a Clinton victory could lift that index by around five percent, while policy uncertainty following a win by Donald Trump could see it fall by five to 10 percent.
Clinton is seen as the more status-quo candidate by investors, while Trump’s stance on foreign policy, trade and immigration has unnerved the financial markets.
In Europe, bank shares benefitted most on Monday, led by HSBC. The emerging markets-focused bank posted a sharp jump in its core capital, bolstering the outlook for near-term dividend payments.
There was also a reversal for many of the so-called safe-haven investments that performed so strongly last week when polls showed Trump closing the gap.
Gold, government bonds and the Swiss franc were all down on Monday.
A big winner was the Mexican peso which jumped around two percent. The currency has acted as a bellwether of sentiment as Trump’s proposed policies are considered deeply negative for the country.
The Mexican peso is surging https://t.co/Fw3rckySKC— Gunow UK (@Gunow_uk) November 7, 2016
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