Sectors and stocks in focus as Donald Trump set to become 47th US president

As Donald Trump appears set to take the presidency as the 47th US President, analysts are forecasting notable shifts across key sectors and market dynamics. This victory is expected to impact US-India trade policies, foreign investments, and currency movements, marking significant trends for market participants.

Global markets displayed optimism following Trump’s decisive lead, with Nifty and Sensex climbing nearly one percent. Deepak Jasani, Head of Retail Research at HDFC Securities, remarked that the US election outcome has generated a positive short-term sentiment, likely spurring traction across global markets, excluding China. However, some volatility may still affect European markets. 

Pravesh Gour, Senior Technical Analyst at Swastika Investmart, highlighted Nifty’s recovery from 23,800, eyeing a hurdle at 24,650. Should this level break, Nifty might target the 25,000-25,200 range, with immediate support resting at 24,040 and a deeper base at 23,800. Bank Nifty has shown outperformance, with resistance at 52,300-52,600, and if breached, could move towards 54,500, while support remains at 51,000.

Currency and bond yields

In response to Trump’s potential victory, the dollar surged, contributing to a weakened rupee. Analysts expect the dollar to remain strong, but lower crude prices and positive domestic equities may offer the rupee some resilience. Shrisha Acharya, Vice President at Anand Rathi Global Finance, noted that US Treasury yields may rise, potentially pushing India’s 10-year yield above 6.90 per cent.

Energy and crude oil

Trump's stance on energy production might lead to increased oil exploration, supporting crude oil companies like Bharat Petroleum, Indian Oil, and Hindustan Petroleum, especially if Brent crude prices remain subdued. Analysts also point to potential gains in energy collaboration with India as demand rises.

Impact on exports

A stronger dollar may benefit Indian exports; however, Trump’s "America First" trade approach could introduce increased tariffs, posing challenges for India’s export sectors. Analysts warn of potential hurdles in US-India trade, particularly affecting sectors dependent on US markets.

IT sector faces headwinds

Trump’s stance on US-India ties could dampen the technology sector, as analysts predict a less favourable climate for collaborations in technology and defence. Equinomics Research anticipates continued consolidation in the IT sector, with mergers and acquisitions potentially on the rise.

Domestic sectors to watch

With a focus on domestic demand, sectors such as automobiles, FMCG, and cement are positioned for moderate single-digit growth. However, analysts see stronger potential in banks, infrastructure, and pharma, with tyre manufacturers set to benefit from stable crude and rubber prices.