Stock markets around the world are jittery as millions of American voters are set to cast their ballots today to elect the next US president. Sensex and Nifty fell in early trade as analyst views varied widely on whether the Donald Trump-led Republicans or the Kamala Harris-led Democrats would be positive on India.

Nomura India believes a Trump victory will likely be negative for Asian stocks ex-Japan, while it views Harris as positive. In the betting markets, Trump has lost some of his earlier momentum, with the Trump/Harris odds now almost neck and neck.

“Our US economic team notes that US swing states will be the ones to watch on election night (Wednesday morning in Asia), where early calls from swing states will likely indicate the candidate has greater momentum, given that errors in “A unified government is the most likely scenario if Trump wins, while a divided government would be likely under Harris,” the foreign brokerage said.

Emkay Global said that stock markets could temporarily welcome a rebound in US stocks in the event of a Republican (Trump) victory. Not to mention that Chinese stocks would hemorrhage due to increased market uncertainty and this could also be tactically positive for India on the FPI positioning and flows front, he said.

“However, there will be challenges to sustaining this rally globally and domestically as well. Our equity strategy team believes that a Red Sweep would likely trigger a rally in the near term, but whether it will sustain depends on market dynamics. profits and valuations, both of which are low,” Emkay said.

JM Financial published a report on the likely impact of the US elections and, in particular, a Trump victory, on 13 national sectors:

Banks and NBFCs
A Democratic result could lead to a rate cut from the RBI. This would be positive for NBFCs, whose stocks had rallied from July to September in anticipation of a rate cut by the US Fed.

“Due to the recent correction, stocks are reasonably valued while the underlying argument that fixed rate asset portfolios are well placed in a falling rate cycle remains valid. In the banking sector, of “Significant rate cuts are expected to result in NIM compression for the sector as a whole (large NIM reductions for the sector as a whole). Private banks are relatively better placed,” he said.

A Republican result could lead to a tighter interest rate regime in the US (and therefore a stronger dollar), which could keep the RBI on the back foot when it comes to interest rate cuts. This could ensure that interest rates in India do not fall precipitously and hence expectations of NBFCs outperforming banks may not be borne out.

PSU banks could be relatively profitable here given the recent correction and acceptable valuations, JM Financial said.

Insurance
A steep yield curve is good for the life insurance industry. Keeping Democrats in power means deeper rate cuts, which will be beneficial for life insurers, JM Financial said. A Republican result could be negative at the margin for insurance companies, he said.

IT services
Trump, in his previous term, attempted to curb the H-1B visa program. His policies have led to increased H-1B rejection rates, higher H-1B/L-1 visa processing fees, and wage inflation for H-1B resources. A similar political position cannot be ruled out during his second term. That said, Indian IT services players are now safer from such anti-immigration policies than they were in 2016, JM Financial said.

“All players have accelerated local recruitment in the United States. The majority of their American employees are now no longer dependent on visas (local/green card holders). The impact of such policies on the ability of players to provide services or the impact on margins due to cost inflation could therefore be limited,” JM said.

Drugs
JM Financial said Biden-Harris let Medicare directly negotiate prices for some prescription drugs (effective 2026). Medicare’s negotiating capacity is limited to certain very expensive drugs (currently 10 drugs) from a single source (without competition from generics/biosimilars). The drop in drug prices due to this negotiation could be negative for innovative companies. At first glance, this is neutral for Indian generic manufacturers.

“Many Republicans want to repeal the measure. However, the Trump administration has remained tight-lipped about its plans. Harris has indicated she would like to accelerate the pace of negotiations. This could result in
expanded list of drugs under negotiation,” JM said.

Democrats have increased the population eligible for subsidized health insurance and the amount of subsidies under the Affordable Care Act (ACA). These “enhanced subsidies” are set to expire in 2025. Republicans, on the other hand, have not announced their plans for the ACA. However, many have said that these benefits should expire, which would be negative for the entire healthcare industry. A Harris administration
JM Financial would like to make these subsidies permanent, which can be a neutral and positive event for the entire healthcare industry.

Automotive accessories
A Trump victory and increased tariffs on Chinese imports would mean that China+1 de-risking could accelerate and could benefit Indian auto ancillary companies in terms of higher exports. However, Trump’s protectionist policies may force Indian companies to invest in the US to locate supplies, which were otherwise exported from India, JM Financial said.

Oil and gas
Trump’s pro-oil and gas policies could be a bit bearish for the global oil price, as they could encourage investment in U.S. shale assets. Trump’s promise to end the Russian-Ukrainian war and Middle East tensions could eliminate
geopolitical risk premium in relation to the price of oil. Trump’s likely approval of a new US LNG export plant could lead to a normalization of spot LNG prices from current high levels.

Real estate, commercial real estate and flex operators (Offices)
Delays in lowering rates could impact demand in the lower end of the property market. Trump’s “America First” and anti-immigrant policies could impact IT/IT (did not during his first term). India is the largest offshoring market and has the largest number of Gulf countries in the world. Both sectors (IT/GCC) are large employers and the largest office occupiers in India. Therefore, an inward-looking policy on the part of Trump can have an impact on the fate of the country.
office owners (REITs/DLF etc.) and co-working/flex operators.

Raw materials
Raw materials were subject to high tariffs during Trump’s previous term, effectively disrupting effective price determination. With regionalism and commodity segregation accelerating, metal prices may rise slightly under the Trump regime.

Chemicals
Higher tariffs on Chinese imports under Trump could lead to greater competitiveness for Indian chemical exporters. So, despite the imposition of 10-20 percent tariffs on Indian imports, India’s chemical exports could witness a significant increase.

Exporters of solar cells and modules
US imposed barriers on import of solar PV cells/modules from China and exports of solar modules to US from India increased by Rs 600 crore in FY21 at Rs 10,500 crore YTDFY24. Other measures taken by Trump could benefit exporters of solar cells/modules.

Textiles
A stronger U.S. economy under Trump could improve retailer confidence and potential clothing imports from India.

Tiles
Morbi players are exposed to the United States and therefore, if Trump wins, they could benefit from higher tariffs on China. Higher exports from Morbi could help improve domestic volume growth and achievements of domestically focused tile brands.

Wires and cables
Higher tariffs on Chinese wire and cable companies could also benefit domestic wire and cable exporters to the United States.