US Election Result 2020: In chat with Anil Singhvi, expert Ajay Bagga decodes why US Markets are up despite Trump trailing
US Election Result 2020: Despite incumbent President Donald Trump trailing Democratic challenger Joe Biden, the markets are still going strongly. What does this means for the investors? Market expert on Zee Business panel Ajay Bagga, who is keeping a close watch on the US elections, gives his views in a chat with Managing Editor Anil Singhvi
US Election Result 2020: Despite incumbent President Donald Trump trailing Democratic challenger Joe Biden, the markets are still going strongly. What does this means for the investors? Market expert on Zee Business panel Ajay Bagga, who is keeping a close watch on the US elections, gives his views in a chat with Managing Editor Anil Singhvi.
Bagga said that he had earlier given three possibilities emerging from this election - if Biden wins the election the markets will see some softening before they again begin to rise. This is expected around January at the time of the announcement of the stimulus. If Trump wins this election the market may go up by 10 per cent. The third possibility was that the election will be contested, in which situation the markets would see some correction.
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The third possibility is unfolding before us, he said adding that it now appears that Biden has almost reached the magical 270 mark.
Meanwhile, Trump has already filed almost 300 lawsuits all over the US. The strategy of the Trump camp will be to reach Supreme Court and get a few votes cancelled. This could be a long drawn battle, he further said.
Supreme Court may not intervene if Biden takes states like Nevada, where the fight is close. If both parties manage to get around 260 votes each and if 1-2 states remain as the deciding factor, then the fight could go longer, he said.
Markets are running because there is a realisation that even if Biden wins, he does not have the Senate control. He might not have his way on tax related issues. This is why stock markets are running.
Nasdaq was up 4 per cent on Wednesday, he said. He said that there is no blue wave and there is a split mandate. Though the House is with the Democrats, it is not as strong as the Senate.
This situation is akin to the Obama Presidency and issues like climate change could take a back seat, Bagga said.
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What will come to the fore is financials, oil and gas sector. The oil prices were up today, he said.
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