Experts predict that Donald Trump’s emphasis on fossil fuels and green stocks will continue to pressure the Indian stock market next week.
Trump 2.0:
Dalal Street and other international stock exchanges eagerly await the economic prognosis that the new government will provide following the inauguration of the 47th US President, following the stock market fall that preceded Donald Trump’s swearing-in date. Investors would be interested in learning about Donald Trump’s administration’s tariff strategy and its plan to reduce geopolitical tension, particularly in the Middle East and the Russia-Ukraine conflict. However, upon his return to the White House, Donald Trump’s policies regarding US inflation and the US economy will also be a significant draw.
According to stock market analysts, the market anticipates that the Donald Trump administration would put American interests first through trade deals and tariffs. This might be a problem for nations like Vietnam, South Korea, Japan, and China. Donald Trump might help India, Indonesia, Malaysia, and Thailand by putting these US interests first. However, Asian nations’ green projects may be hampered by the Trump 2.0 administration’s protectionist policies. According to them, Trump 2.0 is anticipated to help defense technology firms, but the tariff war may pose difficulties for businesses focusing on exports.
The following is a list of the top five things Indian stock market investors should be aware of before Donald Trump takes office:
- Damage to green stocks: Donald Trump’s fossil fuel-friendly policies could complicate Asia’s energy transition to renewables if he continues his protectionist policies, which could temporarily benefit US-based oil companies like Exxon Mobil but impede broader green energy efforts due to the anticipated escalation of the tariff war, according to Ross Maxwell, Global Strategy Operations Lead at VT Markets. Therefore, pressure on India’s solar and other green energy equities is expected next week.
- Benefit for Defense Stocks: Trump’s trade battles and tariffs may cause economic turbulence in Asia, but specific industries, including technology and defense, may prosper. According to Ross Maxwell of VT Markets, Trump 2.0 is thus anticipated to encourage short-term purchases of defense and tech-enabled defense equities. Speaking about the benefits for Indian defense firms, Anshul Jain, Head of Research at Lakshmi Shree Investment and Securities, advised investing in tech-enabled defense stocks, such as drone and aerospace, instead of traditional defense stocks.
- Pressure on export-oriented businesses: According to Anshul Jain, Donald Trump’s protectionist tariff strategy is anticipated to provide difficulties for industries such as IT and textiles. Nonetheless, one should avoid accepting new roles in large-cap IT and other export-focused businesses.
- Benefits of fintech stocks More IT talent may remain in Asia due to Donald Trump’s stricter immigration laws and the strengthening of regional innovation hubs in nations like South Korea, Singapore, and India. According to Ross Maxwell of VT Markets, fintech businesses may profit from this change. Therefore, it is recommended that when the market reopens on Monday of next week, one should continue looking for fintech stocks.
- Benefits for Infra Rail Stocks: Businesses are expected to move from China to India, Vietnam, and Indonesia due to Donald Trump’s decoupling from China. If trade restrictions with China continue, India’s emergence as a manufacturing powerhouse might accelerate. Infrastructure, transportation, and logistics—particularly rail logistics—will thus probably become more in demand. According to Anhsul Jain of Lakshmi Shree Investment and Securities, infra and railway companies are anticipated to stay out of the bulls’ sights in the foreseeable future.
