2024 US Elections: Impact on Indian Stock Market

The US Election 2024 is around the corner and the talks are already making headlines. It is because the election is not just important for America as it would affect countries worldwide, including India. The United States is one of the world’s biggest economies and what happens there can change markets, businesses, and relationships between countries. For India as well, the election could change key areas like partnerships, trade, and technology sharing. So, let’s learn how the 2024 US Election can impact the Indian stock market.

Why the US Election 2024 is Important

The US Presidential Elections of 2024 happening on 5th November are quite important as the United States has a huge influence on the world. The US is a major trade partner for India and the country also makes large investments in many Indian industries. Hence, the relationship between the two countries affects defence, technology, and global cooperation. So, if the US witnesses changes in policies after the election, then it could affect how much India can export to the US. It would also affect how the two countries would work together on defence and security matters.

How US Elections Impact Global Markets

There is no doubt that the Indian market would be affected by the US Election. But how it would impact the global market? Well, every time there’s a US Election, the global stock markets experience several changes and here’s how:

• Stock markets may become unstable as investors wait to see who wins the election.
• There would be short-term effects as prices of stocks would fluctuate during the election period on account of uncertainty.
• Investors may witness long-term stability only after the winner is announced and policies are clearer.

So, for the US Election 2024, investors in India can expect the same pattern, which is temporary market instability followed by stabilisation.

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Impact of US Economic Policies on India

The US Election's impact on the stock market in India would depend on the economic policies of the candidates. Let’s take a look at how each candidate may influence India:

Effect on the Indian IT Sector

The Indian IT sector which includes major companies like TCS, Infosys, and Wipro relies heavily on business from the US. What happens in the US Presidential Elections in 2024 will affect these companies. Here’s how:

• Donald Trump’s H-1B Visa Policies: Trump previously imposed strict visa rules, which made it harder for Indian professionals to work in the US. If he wins, these rules may return.
• Kamala Harris is expected to be more open to global talent, which could help Indian IT companies continue growing their business with US clients.

Defence and Strategic Partnerships

The outcome of the US Election 2024 would also affect the defence partnership between India and the US. India and the US have been working together in defence and security, especially in the Indo-Pacific region. So, there may be a more transactional approach or long-term cooperation in defence and security, depending on who wins the election.

Short-term Volatility in the Indian Stock Market

As the US Election 2024 is coming closer, Indian investors may see short-term volatility in the stock market, and here’s why:

• Uncertainty: Until the election is decided, investors may not know what policies would come into effect, which may lead to ups and downs in the market.
• Reactions to Election News: Indian stock prices may fluctuate based on reports or developments in the US Election race.

Experts believe that while there may be temporary volatility, the market will settle down once the election results are final. So, the US Election's impact on stock markets would likely be a short-term reaction, and long-term trends would depend on broader economic conditions.

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Long-term Impact on the Indian Economy

The long-term effects of the US Presidential Elections of 2024 on India would depend on who wins the presidency. Here’s a comparison of the potential outcomes:

How Indian Investors Can Prepare

Now if we consider the possibility of volatility in the market during the US Election 2024, Indian investors should keep the following tips in mind. The more they are aware of these things, the better it is for their investments:

• Do not forget to focus on the long term. Instead of reacting to short-term changes, you must stick to a long-term investment strategy.
• You must diversify your investments. So, make sure you spread your money across different sectors and countries to lower the risk of market changes. Apart from investing in shares, you can invest in bonds, NCDs, and more.
• Keep track of the candidates' policy updates so that you can make better decisions for the growth of your investments when investing.
• As investors, you should avoid emotional decisions. During these uncertain times, it is quite easy to make decisions based on fear or excitement. So, stay calm and refrain from doing so.

Conclusion

Undoubtedly, the US Election 2024 is going to have a global impact, and India is no exception. While the US Election's impact on stock markets may cause short-term fluctuations, the long-term results would depend on the new president’s policies. As Donald Trump and Kamala Harris compete for the presidency, make sure you are prepared for changes in the global economic environment.

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