India's equity market reacted positively to Donald Trump's lead in the 2024 U.S. presidential election, with benchmark indices—the BSE Sensex and NSE Nifty 50—rallying over 1 per cent each. This surge boosted investors' wealth by ₹8 lakh crore.
After markets closed in India, Trump crossed the crucial 270 electoral votes, securing victory over Democratic candidate Kamala Harris.
The Sensex closed 902 points, or 1.13 per cent, higher at 80,378.13 on Tuesday, while the Nifty 50 gained 271 points, or 1.12 per cent, to settle at 24,484.05. In the broader market, the BSE Midcap and Smallcap indices rose by 2.28 per cent and 1.96 per cent, respectively.
The market capitalisation of all BSE-listed companies surged to ₹453 lakh crore from ₹445 lakh crore in the previous session, enriching investors by ₹8 lakh crore.
IT Stocks Lead Gains Despite Concerns
Gains were primarily driven by IT stocks, despite experts raising concerns over potential trade tensions under Trump's administration. These tensions could impact key Indian export sectors and influence foreign institutional investors' (FII) flows. Nevertheless, analysts believe India may benefit from Trump's anti-China rhetoric.
Arindam Mandal, Head of Global Equities at Marcellus Investment Managers, commented: “With Trump’s victory, a near-term hawkish stance is more likely, and trade tensions with China could persist, potentially benefiting select Indian exporters over the longer term.” He added that a Republican-led administration might favour cyclical sectors like Industrials and Financials, though megacap stocks could face near-term pressure.
Manish Bandhari, Founder, CEO & Portfolio Manager at Vallum Capital Advisors, said: “With Trump’s presidency, India could see renewed Foreign Portfolio Investment (FPI) inflows as trade and economic alignment strengthen. Despite past trade skirmishes, both nations have built a robust partnership, with the US seeing India as a strategic counterweight to China.”
Bandhari further elaborated: “Trump’s win is set to benefit multiple sectors. The housing and energy sectors, including coal, thermal projects, nuclear projects, and oil drilling companies, are poised for growth in the US. Discretionary tax cuts may drive higher consumer spending, indirectly benefiting Indian exporters. Both the US and Indian IT sectors stand to gain from increased IT investments.”
Sectoral Indices and Stock Performances
Among sectoral indices, the Nifty IT index surged 4 per cent, while Nifty Realty and Oil and Gas gained nearly 3 per cent each. Stocks like Bharat Electronics Ltd, Adani Enterprises, TCS, Wipro, Infosys, Tech Mahindra, and HCL Tech led the gains in the Nifty50 pack.
Chinese Markets Feel the Impact
While Indian and Japanese markets welcomed Trump’s win, Chinese markets suffered losses. The Hang Seng Index dropped over 2 per cent on Wednesday, the Shanghai Composite closed marginally lower, and the CSI300 Index of blue-chip Chinese stocks fell by 0.5 per cent.
Experts anticipate renewed trade tensions. During his campaign, Trump pledged to raise tariffs on Chinese imports, potentially implementing a 60 per cent tariff on top of the 25 per cent already levied during his first term. This could weigh heavily on China’s economic outlook.