The Indian stock market responded strongly on Wednesday to the US election results, with Sensex and Nifty 50 both rising over 1% as former President Donald Trump appeared poised for re-election. Sensex closed 901.50 points higher at 80,378.13, while Nifty gained 270.75 points to settle at 24,484.05. Market optimism reflects anticipation of a Trump presidency, though his protectionist economic stance could bring mixed effects for India.
Analysts expect Trump’s economic policies to impact US Federal Reserve interest rate strategies, likely curtailing planned rate cuts. This could affect foreign investment flows into India, potentially slowing capital market growth and complicating India’s inflation control efforts, noted Nitin Aggarwal from Client Associates.
Trump’s trade policies, often favoring tariffs, may pose challenges for emerging markets, including India’s IT and pharma sectors. “Protectionist policies could pressurize India’s tech industry and pharmaceutical exports to the US,” said Ross Maxwell of VT Markets. However, Trump’s firm stance against China could open opportunities for India, as supply chains shift.
Nomura’s research emphasizes that India, with its large consumer base and manufacturing initiatives, stands to gain from this reallocation, particularly in defense and tech exports.
On a global scale, Trump’s policy stance toward Russia and Israel may influence geopolitical tensions, creating both risks and opportunities for global markets.
