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Global Markets Tumbles on Trump's Victory
Thu, 10 Nov Pre-Open

Global markets are facing some serious pressure. Markets were favoring Clinton as a status quo candidate. She was looked as a safe pair of hands for the world economy.

However, it turned out the other way. This has triggered massive uncertainty across the world.

The global economy is witnessing a threat of moving towards a closed economy.

Brexit, Europe migration crises and now Donald Trump.

Donald Trump's stance on Trade & Globalization, Social security, and Jobs & Income is daunting the world economy.

What is there for the Indian Markets?

Indian markets tanked yesterday. Both BSE-Sensex and NIFTY were down 1.2% and 1.3% respectively.

There are some of key things to look out for which will impact the Indian markets:

  • Jobs & Income - US is expected to curb the immigration and slash imports to create jobs. This is expected to impact various sectors (such as IT, Pharma) across the world.

    Trump terms H1B visa program as unfair. Indian IT stocks and IT companies will be impacted.
  • Trade Agreements & Globalization - Mr. Trump has a very strong view on free trade. This could initiate a trade war and dent the world economic growth.

    It could lead to re-negotiation of all the foreign trade deals which will affect the treaties with India.
  • Taxes - There could be decline in the tax rates from 35% to 15% in the US. This can result in companies like Ford, General Motors and Microsoft rushing back to US.

All these things have created uncertainty and that has resulted in the volatility. This could continue for some time.

However, we think the volatility will be good in the short run. In the long run, the market would mirror the performance of the Indian economy.

Further, the above move should not have any marked change in your investment approach. The principles of stock selection still remain the same: buying fundamentally strong companies, run by a competent management team and available at reasonable valuations.

Meanwhile, we would certainly keep you posted about whether our views on companies and sectors warrant any significant change on the back of the above development. So stay tuned and do keep an eye out for updates from our end.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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May 26, 2017 (Close)

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