Donald Trump's late surge in polls hits European shares as fear and uncertainty mount

European shares fall following an eighth day of losses on Wall Street

Donald Trump at a rally in Florida on Tuesday. Polls in the race have been narrowing (AP)

Mounting uncertainty over the outcome of the US election next week continues to punish stocks across the world

Recent market jitters over the race to the White House started a week ago, after the strong enthusiasm for Democratic candidate Hillary Clinton, seen as the status quo candidate by markets, dropped following the renewal of FBI’s email investigation.

European markets have followed Asia and the US with the tightening race hitting stocks in early trading on Friday.

The FTSE 100 opened a further 50 points lower, taking the index to its lowest level since mid-September.

The picture was similar across the channel with Germany’s stock index DAX and the France’s CAC, the most widely used indicator of the Paris market, falling 0.4 per cent and 0.2 per cent respectively.

This followed a drop in Asian shares overnight and an eighth straight day of losses on Wall Street’s S&P 500 – its longest run of losses since the financial crisis in 2008.

Meanwhile the Vix volatility index – a measure of investor confidence known as the “fear gauge” – rose for the eighth day in succession.

Michael Hewson, chief market analyst at CMC Markets UK, said the closeness of polls preys on investor’s minds. He said: “With only a few more days to US polling day the closeness of the polls continues to jangle nerves in the market, with the result that the declines appear to be gaining a momentum all of their own.

"This negative sentiment is also spilling over into Europe’s markets as they also slip back as the weaker US dollar pushes up the pound and the euro".

Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities, said that the outcome of the race is unpredictable, referring to the UK's vote to leave the EU in June. He said: "Even if opinion polls show that Clinton is maintaining a lead, anything can happen at the last minute, something the Brexit outcome taught us".

With only a few days to go before election day, a new poll by New York Times/CBS gave Ms Clinton a three-point national lead over Donald Trump.

The findings of that poll were very similar to one commissioned by ABC News/Washington Post, which have been operating a tracking poll that scored the race 47-45 in her favour.