Advancing to the US election outcome, the top Asian equity charts are showing a good rally on Thursday. Taking the cues from the emerging marketing peers, the Indian equity market also began its day's session rising with over 1 percent. The Nifty also crossed the 12,000 marks, relying upon 150 points. Sensex also showed a move of over 500 points in the early trading session and closed at 41,340.16.
The latest reports explicate that the Democratic candidate, Joe Biden has secured over 264 electoral votes, meanwhile, Donald Trump has won only 214 seats so far.
Analysts are forecasting that Biden win is likely to be favorable for the emerging markets equities, including the Indian market considering his plans to raise taxes and to bring in stricter financial regulations. In this scenario, the institutional funds are likely to find their way to the Asian equities. Another factor that will provide the Emerging Markets equities an edge over the developed markets will be that the next round of inducement by the new US government. In a market already fuelled by massive liquidity, more inducement is seen as a positive sign. Analysts say that it had been seen in the past that an economic inducement has worked in favor of the Emerging Markets equities.
Not just this, many other factors make Emerging Markets equities a better bet over the developed markets equities. A Better virus handling trend in Asian countries that are relative to the US and Europe; and a strong government and listed corporate balance sheets, especially in North Asian parts; with a stable political climate, especially in post-pandemics Asia/India; and generally stable, cohesive societies and values which suit government diktats on pandemic control measures, unlike in the West; and a strong recovery in economic data post-pandemic, especially when China filtering through rest of the region, analysts at Nomura Inc said.
As far as India is concerned, whoever wins, the difference will be just materialistic in the long run, coming to the trade policy front. However, on an immediate basis, there will be an impact on some stocks in particular sectors as predicted by experts.
“From an Indian market perspective, the US election drove trends could imply that the Indian IT stocks & Reliance Industries Ltd (internet play) can gain traction as seen in the trade today and cyclical stocks, said analysts at Jefferies India Pvt. Ltd.
Analysts at Edelweiss Securities also expects the IT Sector to benefit with a Donald Trump win along with the chemicals and the Automotive Sectors, whereas Democrats will be better for the pharma and stimulus, said the domestic brokerage firm.