Elara Capital predicts that a second term for Donald Trump as US President will have favourable outcomes for US equities and a mixed outlook for India’s economy. The Indian rupee may face depreciation pressures due to the strengthening of the U.S. dollar and firming yields. However, Elara Capital remains optimistic about Indian equities, particularly in sectors like IT, pharma, EMS, and defence. The Federal Reserve may adopt a longer-term hawkish stance, potentially raising interest rates beyond market expectations. India may face trade challenges from Trump’s ‘Make in America’ agenda, but could benefit from his anti-China stance. Elara expects Indian IT to benefit from higher US corporate IT spending, driven by Trump’s proposed tax cuts. India’s oil-import- dependent economy may gain as lower global oil prices benefit OMCs and other sectors reliant on crude oil derivatives.
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