Donald Trump, the Republican party candidate, has won the US Elections 2024 with a thumping victory and is set to become the 47th president of the United States. While a number of brokerage firms and market pundits have given Trump's victory a major thumbs up, select analysts see several risks and contradictions for India. Kotak Institutional Equities notes several contradictions in the Trump trade including corporate tax cuts in the US may result in higher earnings and spending on IT services but will also result in higher fiscal deficits (if unfunded) and US dollar weakness in the medium term.
Higher import tariffs will result in higher inflation and interest rates and lower growth in the US, it said. Kotak added that the ‘America First’ policy may limit outsourcing and impose fresh restrictions on visas and an anti-ESG approach may not be positive for a portion of India’s exports such as solar PV modules, and more. "EMs are even less likely to find favor with asset allocators.
FPI outflows from India may accelerate in the near term, given the dominance of passive inflows in FPI flows," it said. Indian stock markets had cheered Trump's triumph in the trading session on Wednesday, with benchmark indices posting big gains. However, bears countered attacked on Thursday with Sensex and Nifty taking a beating and dropped up to one per cent in the early trade.
Trump's victory means fewer Fed cuts, with expectations of one more cut next year. At the outset, while India will .
