As vote counting progresses in the 2024 US presidential election, early trends indicate Republican candidate Donald Trump taking a lead over Democrat Kamala Harris. Analysts suggest a Harris victory would maintain the Biden administration’s policies, offering continuity that could ease political uncertainty, while a Trump win might introduce tariff wars but potentially bring a favorable corporate tax regime and reduced regulatory burdens, which could lift market sentiment in the short term.
If Harris secures a win, it could lead to stability, easing investor concerns. However, experts believe the medium-term impact on Indian markets may remain largely unaffected by which party gains power, given historical data showing no clear trends based on US administrations.
Under Biden’s tenure, US indices such as the Dow Jones, S&P 500, and Nasdaq saw impressive gains, with Nasdaq surging over 140%. In comparison, Nifty achieved a 75% return. During Trump’s previous term, the US markets performed well, though Nifty underperformed the US indices with a 38% return.
Emkay Global noted that a Democratic sweep could lead to a potential correction in markets, though they advise buying into any dip, as the Indian economy is not heavily impacted. A Trump win, on the other hand, might trigger a brief market rally, though the brokerage remains uncertain about its sustainability.
UBS anticipates that bond yields have risen too high and expects a 10-year yield of 3.5% by June 2025, regardless of the election result, as inflation is projected to decline, and the Fed is likely to stay on a path toward lower rates.
In the case of a Trump presidency, India-US ties, especially in defense, trade, and strategic areas, could experience shifts, impacting sectors like technology, infrastructure, and renewable energy.
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