Indian market likely to be in benefit irrespective of who wins the U.S presidential elections
Investors took into account factors like trade and foreign policy, Fed policy, and fiscal spending on infrastructure while analyzing the market patterns
The Indian market will emerge as one of the biggest beneficiaries of the United States presidential election, believe investors.
According to Swiss multinational investment banking company UBS Group AG Group, the potential impact on a dozen of Asia Pacific’s biggest markets puts India as a winner in each of their three chosen scenarios -- a Biden and Democrat sweep, a Biden victory and divided Congress, and a status quo Trump victory, said a report by Bloomberg carried by LiveMint.
The analysis takes into account factors like trade and foreign policy, Fed policy, and fiscal spending on infrastructure.
The analysis further noted that in case of a Democrat sweep, India would benefit from potentially more favorable U.S. trade policies, while a Trump victory or divided Congress with Biden would also be a win for India on easy Fed policy.
India has high yield spreads over U.S. Treasuries and could experience more capital inflow if U.S. rates remain lower for longer and global investors hunt for higher-yielding assets, the analysis quoted in the report further said.
Further, the report said that Japan is also an emerging focal point for analysts.
According to Goldman Sachs Group Inc, in Japan, the performance of the benchmark Topix Index has tended to weaken around the U.S. elections, mainly reflecting increased uncertainty, while the yen has often depreciated after the vote.
The Goldman strategists as quoted in the report said that a victory for Donald Trump or Republicans maintaining control of the Senate would reduce policy uncertainty, while a Biden victory and Democrats seizing control of both houses of Congress would likely mean a corporate tax-rate increase or other new policies.