Trump vs Biden: What's in store for stock markets?
In case of Indian stock market, irrespective of whether Trump or Biden win in the US presidential election, investors are likely to stay bullish as India is likely to benefit from improved relations with the US
- Nov 3, 2020,
- Updated Nov 3, 2020 9:16 PM IST
As the world's oldest democracy goes into election mode, stock markets across the globe are likely to witness volatility, especially the US, until poll results are out of the way. It would be interesting to see whether a Joe Biden victory in the US presidential elections would be enough to convince investors that Donald Trump is poised for defeat.
According to a report by Axis Asset Management, the signals are mixed, suggesting the result may be a close-run contest between Democratic presidential nominee Joe Biden and Republican incumbents Donald Trump. As on October 27, Trump's chance of winning re-election stood at just 35 per cent, which reduced the possibility of a contested election. Biden's widening lead in the polls is perceived as more negative for stocks (at least in the short run) than fears of higher taxes or regulation under the new presidency, it said.
As per the report, regardless of who wins in the US elections, investors should be careful not to make investment decisions solely based on the polls verdict. On average, there is very little difference in long-term equity returns whether the Republicans or Democrats are in power, it said.
Banking stocks, which represent a large component of value indices, are likely to profit from a stronger economy, especially if accompanied by higher interest rates. The issue is that banks are likely to face a tougher regulatory regime under the Democrats as well, noted Axis Asset Management report.
Voting for the 59th US presidential election is being held on November 03, 2020 where vote will be casted for presidential electors for the Electoral College. These electors, in turn, will vote to choose the new president and vice president on December 14, 2020.
As the world's oldest democracy goes into election mode, stock markets across the globe are likely to witness volatility, especially the US, until poll results are out of the way. It would be interesting to see whether a Joe Biden victory in the US presidential elections would be enough to convince investors that Donald Trump is poised for defeat.
According to a report by Axis Asset Management, the signals are mixed, suggesting the result may be a close-run contest between Democratic presidential nominee Joe Biden and Republican incumbents Donald Trump. As on October 27, Trump's chance of winning re-election stood at just 35 per cent, which reduced the possibility of a contested election. Biden's widening lead in the polls is perceived as more negative for stocks (at least in the short run) than fears of higher taxes or regulation under the new presidency, it said.
As per the report, regardless of who wins in the US elections, investors should be careful not to make investment decisions solely based on the polls verdict. On average, there is very little difference in long-term equity returns whether the Republicans or Democrats are in power, it said.
Banking stocks, which represent a large component of value indices, are likely to profit from a stronger economy, especially if accompanied by higher interest rates. The issue is that banks are likely to face a tougher regulatory regime under the Democrats as well, noted Axis Asset Management report.
Voting for the 59th US presidential election is being held on November 03, 2020 where vote will be casted for presidential electors for the Electoral College. These electors, in turn, will vote to choose the new president and vice president on December 14, 2020.