Hillary Clinton suffers shock defeat in New Hampshire primary; Donald Trump wins

Hillary Clinton is well positioned to build a strong, potentially insurmountable, delegate lead next month her campaign manager says.

Hillary Clinton suffered shocking defeat to chief rival Bernie Sanders in the crucial New Hampshire primary on Tuesday, while on the Republican side Donald Trump added momentum to his campaign with a win.

The victory for Sanders and Trump, the so-called party outsiders, reflected the electorate's increasing disenchantment with traditional politics in Washington.

Clinton called Sanders to congratulate him, conceding the race. "I know I have some work to do," she told supporters.

The former Secretary of State had registered a racer-thin majority over Sanders in the Iowa caucus, which was an indication that the road to nomination was not easy for the one-time runaway favourite.

Her supporters, however, were not disappointed, with many shrugging it off as an expected outcome.

Clinton's campaign manager Robby Mook said Sanders's win in New Hampshire was "an outcome we've long anticipated".

"The nomination will very likely be won in March, not February, and we believe that Hillary Clinton is well positioned to build a strong – potentially insurmountable – delegate lead next month," he said in a statement.

Vermont Senator Sanders, who describes himself as democratic socialist, is running a campaign built on themes like action against income inequality and breaking up the big banks.

"Together we have sent the message that will echo from Wall Street to Washington, from Maine to California, and that is that the government of our great country belongs to all of the people and not just a handful of wealthy campaign contributors," Sanders said after the New Hampshire win.

Republican front-runner Trump, who lost the Iowa caucus to Ted Cruz, said in his victory speech he would "knock the hell out" of Islamic State militants. He also traded barbs at Sanders saying he "wants to give away our country."

The campaigns now head to South Carolina and Nevada for the upcoming primaries.