Despite a close contest that saw many predict Obama would lose out – thanks to the high unemployment, sluggish economy and polls suggesting a lack of confidence in his leadership – he managed to see off the Republican nominee.

Winning votes in Ohio and other industrial states in America were thought to have clinched the final vote for Obama, after the President announced he would bail out the Detroit car industry, to demonstrate economic fairness, according to the FT.

Even though Florida’s electoral vote are still undecided, Obama won by a comfortable margin with 303 votes to Romney’s 206.

In the past few hours Obama has been greeting supporters in Chicago where he said he would return to the White House “more determined than ever”. He also paid tribute to his opponent and pledged to work with the Republicans to reduce the government’s budget deficit, fix the tax code and reform the immigration system.

“We are an American family and we rise and fall together as one nation,” he said.

“We have picked ourselves up, we have fought our way back and we know in our hearts that for the United States of America the best is yet to come.”

Asian markets barely responded to the news overnight as concerns over whether Obama and Republican-dominated Congress will be able to avoid a fiscal cliff, which will see nearly £375bn of tax increases and spending cuts his the US economy in January.

The Nikkei 225 index ended the day flat, down 0.03% to 8,972.89 points, the Shangahi index was down even less at 0.01% to close at 2,105.73 while the Hang Seng Index made a gain of 0.28% to 22,005.86.

President Obama’s second successive election win is a positive for both bond and equity investors, industry commentators have said.

Speaking before the election result, Mark Holman, managing partner at TwentyFour Asset Management, said Obama’s win will result in further extensions of quantitative easing during his next four years in power, benefitting treasuries.

“Our take is that Obama’s victory should be positive for Treasury yields, firstly from continued QE support and secondly on fiscal cliff fears, whereas a Romney win would of push 10 year yields back over 2%, from their current 1.68% levels,” he said.

There was also the uncertainty of who Romney will choose to replace Bernanke (as he has promised to do) if he was elected, which would have had a likely knock-on into core Europe and gilts.”

Tom Stevenson, investment director at Fidelity Worldwide Investment, said warned of volatility in the coming weeks but said this could throw out some more attractive entry points for investors, as speculation about upcoming policy changes move markets around more violently than normal.

“There will be volatility over the next ten weeks and I think therefore there may be some good opportunities to get into the market,” he says.
“The market is not expensive though, and valuations are definitely not stretched.”

Cormac Weldon, manager of the successful Threadneedle American fund, is also positive US equities have more to give.

“We continue to believe that the US equity market is attractively valued and the US economy is in better shape than its developed world counterparts,” he says.

“On a comparative basis, the US economy continues to be helped by its developing energy independence, an industrial renaissance and the improvement in the housing market, where inventories have returned to normal and prices have stabilised.”