The US presidential election 2024 has put in play the 'Trump trade' as the Street widely expects the former president to come back to the White House. But polls are predicting a nail-biting finish with all boiling down to the swing states that will determine who gets first to the 270 mark with the electoral college votes.
A 'Trump trade' has seen the Street betting big on equity as it is widely believed that his coming back to power will propel the stock markets further. The trade has seen 10-year Treasuries fall and its yield at 4.28%, it has also seen dollar strengthen against key currencies.
But if the vice president gets to the White House, there will be unwinding of the 'Trump trade'. The Treasuries will rally with yield falling and the dollar will correct significantly to give up recent gains.
'Trump trade' has also seen money being withdrawn from the emerging markets. Foreign portfolio investors have withdrawn nearly Rs 1.3 lakh crore in the last 26 days from the Indian market.
All these will have an impact on Dalal Street, with stocks in sectors like information technology, pharma and renewables likely to react strongly to the election results.
Also Read: US Elections 2024: With Trump Trade And Fund Flows At Play, Here's How India Is Positioned
Here's a look at the sectors and stocks that could be impacted by the Trump versus Harris poll outcome.
Renewables: Indian renewable companies like Premier Energies Ltd. and Waaree Energy Ltd. are likely to get impacted as they export solar modules to the US markets. A Harris win will be seen as a push towards green energy and commitments made by the US under the Paris Agreement, which requires a cut down on fossil fuels by 2035. A Trump win will impact renewable energy as Trump does not want to be held to any commitments on green energy and commitments.
Healthcare: The Indian generic pharma companies will be impacted on the back of not just currency movement, but the position Trump will take on insurance coverage. If the Democrats retain the White House, Harris has proposed to expand insurance coverage. Pharma exporters like Sun Pharmaceuticals Industries Ltd., Dr Reddy's Laboratories Ltd., Divi's Laboratories Ltd., Aurobindo Pharma Ltd., Zydus Lifesciences Ltd. and Lupin Ltd. and Laurus Labs Ltd. Regarding healthcare services firms like Sagility India, which provides tech platform to payers and providers in India and Indegene, a Trump win is likely to remove price caps on drugs.
Merchandise: Apparel makers will be impacted if Trump imposes tariffs on imports from India. Companies like Welspun, Gokaldas Exports, Arvind Ltd. are likely to get impacted.
IT Companies: IT companies have significantly reduced dependence on H1B Visas. But business is likely to get impacted if Trump pushes for more jobs in the US than offshoring. A cut in corporate tax by Trump is likely to bring more businesses for the Indian tech companies but a Harris win will keep policy status quo, and a weakening dollar will impact revenue for the IT majors.
Auto & Auto Ancillaries: Companies like Motherson Group and Tata Motors' Jaguar Land Rover, sales will see rise with rise in disposable income and demand for vehicles.
Chemicals: Indian specialty companies export to the US pharma and agro companies. PI Industries Ltd., Sudarshan Chemical Industries Ltd., Deepak Nitrite Ltd., SRF Ltd., Vinati Organics Ltd., Navin Fluorine International Ltd., Aarti Industries, and Jubilant Ingrevia have significant exposure to the US. Tariff hike will impact these companies.
Defence: A Trump win will see more push for domestic manufacturing in the defence sector. This will bring in more demand for production of ancillaries from India for companies like Boeing.
Watch: Who Will Win US Election 2024?
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