Early results from the 2024 US election show former President Donald Trump, the Republican candidate, gaining an initial lead over Democratic candidate and current Vice President Kamala Harris.
So far, Trump has collected 168 votes, while Kamala Harris bagged 81 votes, reported AFP. A candidate must secure at least 270 of the 538 votes (Electoral College) to become President of the United States. However, if the contest is very close in swing states and in the case of large postal ballot counts, the overall winner may not be clear for hours or even days after Election night.
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According to brokerage firm Jefferies, there is a significant chance of a split government continuing after the US election, potentially limiting the chances of drastic policy changes. However, there could be significant policy changes after a Republican sweep.
“A split government post the US elections likely to continue appears to be the base case, possibly limiting the chances of drastic policy shifts. A potential Republican sweep could bring significant policy changes,” ET Now reported Jefferies saying so.
Impact of Trump’s victory on India
Jefferies, as ET Now reported, believes Trump’s victory may drive a faster ‘China plus one’ move, which could benefit emerging markets and sectors like chemicals and cables. Trump’s triumph may also be positive for fossil plays such as coal and thermal power.
There are apprehensions that Trump’s relatively expansionary policies could lead to higher interest rates, a strong US dollar and a slowdown in global growth. A stronger dollar could aggravate foreign capital outflow from emerging markets, including India.
“In case of Trump’s win, a stronger dollar would be a negative for FPI flows,” said Jefferies.
Brokerage firm Emkay Global Financial Services believes Trump’s presidency could be “more noisy and volatile.”
“A full Trump sweep would likely be the most equity-positive outcome with a favourable corporate tax regime alongside low regulatory burden, while any gridlock is technically equity market-negative. However, the gridlock would be the most bearish outcome for spending, implying good news for bonds. Expect bearish steepening on a full sweep, with higher pressure on term premium in a Red sweep. However, ‘fiscal cliff’ chances on the debt ceiling or government funding also increase with Harris-led split Congress,” said Emkay.
Meanwhile, economists at DBS Bank believe Tariffs against China, in particular, and the rest of the world, in general, would rise under Trump, but they won’t be reduced under Harris either.
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Business NewsMarketsStock MarketsUS election 2024: A Republican sweep could trigger major policy changes, says Jefferies
