Indian benchmark equity indices were down at open on Thursday, amid mixed global cues.
Indian benchmark equity indices were down at open on Thursday, amid mixed global cues.
At opening bell, the BSE Sensex was 112 points, or 0.14 per cent higher, at 80,490, and the Nifty 50 was at 24,434, down 50 points, or 0.2 per cent.
Investors tracking major investment trends are evaluating the impact of Donald Trump’s election as the next US President on Indian companies. With Trump likely to impose tariffs on US imports, uncertainty surrounds the outlook for Indian exporters. This could shift investor focus toward shares of companies benefiting from domestic demand.
Market View| – Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
The Trump victory is turning out to be more potentially transformative than thought earlier. With the Congress and the Senate coming under Republican control and President Trump exercising power without bothering about another term in office, hugely transformational decisions are possible in the months following Trump’s assumption of office. These decisions may turn out to be both good and bad. His pro- business initiative of ‘America First’ can strengthen the American economy. But if he walks his talk and imposes a 60% tariff on Chinese imports and 10 to 20% tariff on imports from other countries, that would trigger inflation and jeopardise the Fed’s policy of containing inflation, necessitating a rethink of the Fed’s present policy of rate cut. This has the potential to negatively impact global stock markets.It is important to understand that even though Trump’s anti-China policy has positive implications for India, Trump has been critical of ‘India’s high tariffs’ and won’t hesitate to impose tariffs on India’s exports to the US.
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Global Cues
Most markets in the Asia Pacific region fell on Thursday after Trump’s win.
The only index trading in positive territory was China’s Shanghai Composite, which was up 0.13 per cent.
The CSI300 was down 0.12 per cent and Hong Kong’s Hang Seng index was down 0.15 per cent.
In Japan, the benchmark Nikkei 225 was down 0.3 per cent.
South Korea’s Kospi was 0.3 per cent lower, with the small cap Kosdaq also down 1.73 per cent.
Australia’s S&P/ASX 200 traded 0.41 per cent lower.
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Meanwhile, Wall Street tore to record highs on Wednesday and major stock markets around the world surged, while bitcoin hit an all-time-high and the dollar was set for its biggest one-day jump in four years after Donald Trump was elected US president.
Trump’s decisive victory pummelled long-dated Treasuries and revived the “Trump trade,” as yields rose in anticipation that Trump will hike tariffs as he has promised, increasing the US deficit and inflation and causing the Federal Reserve to cut interest rates by less than it otherwise would have.
