[KUALA LUMPUR] Asian stocks slumped the most since June in volatile trading as Republican Donald Trump won the US presidential race, shocking investors who had expected Democrat Hillary Clinton to win.

The MSCI Asia Pacific Index fell 2.6 per cent to 134.3 as of 4:55pm in Tokyo, with short-term volatility spiking on Wednesday as Mr Trump stunned traders by defeating Mrs Clinton to become the 45th president of the US.

Markets from Japan to India fell the most since at least June 24, when Britain shocked investors by opting to leave the European Union, as investors dumped global risk securities and bought safe-haven assets including the yen and gold.

"This is on a completely different level to Brexit," said Norihiro Fujito, a Tokyo-based senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities Co.

"The framework of the world will change, not only in terms of economies and the financial markets, but also in terms of national security, foreign policy."

After starting the day higher, the Asian equity benchmark soon erased those gains as results started pouring in showing Mr Trump edging ahead of Mrs Clinton in the most contentious US election in recent history.

The gauge languished near the day's lows as it became clear that the real-estate developer and reality-TV star was gaining an upper hand in key states, putting him on course to become the 45th president of the United States.

Surprised Markets

Just 59 shares rose compared with 925 stocks that fell on the Asian benchmark, while trading volume doubled in markets including Japan, Hong Kong and South Korea. The Topix Index slumped 4.6 per cent for its biggest drop since June 24, dragged lower by exporters after the yen jumped the most in three months.

Taiwan's Taiex Index was down 3 per cent to head for its largest loss since August last year. South Korea's Kospi index fell 2.3 per cent, New Zealand's S&P/NZX 50 Index dropped 3.3 per cent and Australia's S&P/ASX 200 Index declined 1.9 per cent.

Singapore's Straits Times Index lost 1.3 per cent. Hong Kong's Hang Seng Index slid 2.4 per cent and China's Shanghai Composite Index fell 0.6 per cent, retreating from a 10-month high.

The market was not prepared for a Trump victory, says Mark Matthews, Singapore-based head of Asia research at Bank of Julius Baer.

"Much like Brexit, the polls and the betting websites going into the elections were telling us a Trump victory isn't going to happen," he said.

The Republican, who has never held public office, was projected to be the victor early Wednesday by the Associated Press and television networks after Wisconsin pushed him over the 270 Electoral College vote threshold needed to become president-elect. When sworn in on Jan 20, Mr Trump will preside over a government he's called corrupt and unworthy of trust.

At Stake

The MSCI Asia Pacific Index has fallen 3.1 per cent from its September peak through Tuesday, as global investors looked to the election, which puts the leadership of the world's largest economy at stake at a time when America is divided over immigration, trade and the country's role in the wider world. Speculation Mr Trump may win the election spurred swaps traders to trim wagers on tighter US monetary policy, with market-implied chances of a December rate hike by the Federal Reserve plunging below 50 per cent.

"It's caught people off guard but it's like Brexit," Karl Goody, a private wealth manager at Shaw and Partners Ltd in Sydney, which oversees about A$10 billion (S$10.6 billion), said by phone.

"You're going to see a similar case where people realise there has been an overreaction in the short term and then once it all sinks in and they realise it's not going to affect them as much as they first thought, you'll see a significant turnaround and rebound in the market."

Futures on the S&P 500 Index tumbled as much as 5 per cent before paring losses to 2.8 per cent. The underlying equity measure added 0.4 per cent on Tuesday to cap its best two-day climb since June.

BLOOMBERG