US Election Countdown: Indian Market Will Emerge As a Winner

With less than a week to go, the political drama - US presidential election - is approaching the climax after witnessing campaign ads blanketing the world, campaign rallies reaching fever pitch, and debates turning increasingly fierce. Affected by the election, international financial markets are riding a roller coaster amid the resurgence of the pandemic across major economies, which lifts risk aversion continuously.

Source: BBC News

Notably, the Indian market will emerge as a clear winner compared with international markets. Analysts at UBS Global Research predict that whether Trump or Biden wins, the Federal Reserve‘s low-interest policy is expected to continue, which is an undoubtedly good news for the Indian market. If Biden comes to power, India will benefit from “potentially more favorable US trade policies,” according to UBS Global Research’s report. It is likely to provide a boost to Indian investors sentiment, pushing the markets up. If Trump wins, they assume that negative rates may be considered. It is a big plus for Indian markets as it will result in the continued inflow of cheap capital into Indian stock as well as debt markets.

Source: UBS Global Research

With regard to this weeks economic data, investors should better keep an eye on global GDP data and interest rate decisions of the three major central banks. In addition, talking points next week remain on some uncertain deals around the UK-EU trade talks, the US stimulus negotiations and the progress of the US election.

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