After Monday’s selloff which plummeted the Nifty below the 24,000 mark, the Indian stock market braces for the results of the US presidential elections scheduled on November 5, 2024.
However, Nifty futures haven’t seen much change, according to a News 18 report which gave the following potential market reactions to either a Democratic or a Republican win.
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How would the markets react if Donald Trump wins?
A short-term rally for Indian stocks can get triggered following a Republican win, according to the report which added that such a win could be seen as inflationary leading to a more cautious Fed and a stronger dollar.
However, the report also quoted brokerage Emkay Global as saying that “We think it’ll quickly fizzle out and our base thesis of market consolidation for 2HFY25 stays unchanged. IT (lower corporate tax rates = higher budgets and BFSI (higher for longer rates) are possible beneficiaries, but these would also be transient.”
The report also cites JM Financial as saying that a Trump win would boost industries like auto ancillaries, solar panels, and chemicals, which are facing a tough time now and that higher tariffs on Chinese companies means more growth for India.
How would the markets react if Kamala Harris wins?
The report suggests an unchanged policy framework for both the global economy and the US economy if Kamala Harris wins.
“In such a scenario, the prospect of a global ‘soft-landing’ with US growth converging towards the rest of the world could underpin medium-term price action,” the report cited ICICI Bank as saying. “Fiscal policy would be expansionary but not to the extent expected in case of Trump that implies lower yields than otherwise.”
This also comes with a neutral impact on equity markets, energy prices, gold prices, base metal prices, and the global USD, the report read.
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