The world economy is tense following Donald Trump’s reelection as the 47th President of the United States. It’s unlikely that India will be immune either. How will decision-makers respond to this most recent obstacle?
According to a State Bank of India (SBI) research released on Tuesday, the Indian rupee may see some volatility in the early days of Donald Trump’s administration, but it is expected to stabilize shortly after. This short-term occurrence is known as the “Trump Tantrum.” The report asserted, supported by actual data, that the rupee often performs better under Republican presidents than under Democratic ones. On Monday, the rupee broke the 86 barrier versus the US dollar.
Trump’s second term? What it could mean for India
The future of India’s relationship with the United States may change if Republican nominee and former president Donald Trump is elected to a second term. Trump has made public pledges to fortify what he refers to as the “great partnership” between the two countries, demonstrating a strong desire in doing so. Just before the US election, Trump celebrated his close diplomatic ties with Prime Minister Narendra Modi and reaffirmed his affinity with him in a recent post on X.
IT, DEFENSE AND CRYPTO BOOST
MintCFD’s CMO, Raj Patel, offered ideas into several industries that could benefit from Trump’s win. “With more government spending on defense initiatives, the defense sector is expected to see increased demand, driven by Trump’s focus on military strength,” Patel said.
He went on to say that Trump’s campaign for US energy independence might benefit fossil fuel firms by deregulating the energy sector and fostering a more favorable climate. Patel also emphasized how deregulating the banking industry might benefit big banks by increasing lending activity and profits.
Donald Trump’s reelection may bring about significant changes for the Indian market, with industries like manufacturing, energy, and military standing to gain and offering new prospects for investors, according to Swapnil Aggarwal, Director of VSRK Capital.
Patel also emphasized how deregulating the banking industry might benefit big banks by increasing lending activity and profits.
What will be the Impact on Indian Stock Market?
According to financial experts, Trump’s anti-globalization ideas would have an impact on currency, equities, and developing markets if he wins. “If Trump wins the presidency, rates, gold prices, and the global USD regime may all rise above our base-case projections, while crude prices may fall. If Harris wins, the markets may move closer to our base-case forecasts, with rates probably easing and the USD trading flat globally, according to Sameer Narang, head of economic research at ICICI Bank.
Trump’s trade restrictions may sustain strong US economic expansion, allowing Wall Street to outperform other international markets. As investors expect a greater supply of paper, this situation may lead to an increase in yields, especially in long-term assets.
