Updated: November 7, 2020 8:06:41 am
There is also a sense that a Biden victory will see the union of the global community, as Trump had withdrawn from various treaties and taken extreme positions on issues, including that of Paris. (AP)
In the last two trading sessions, the Sensex has risen 1,276 points, or 3.14 percent, amid a growing probability of an undisputed victory for US Democratic presidential candidate Joe Biden. However, since Election Day, the Sensex is up 1,632 points, or 4.1 percent, and market experts say growth in the markets is not about who is winning, but rather about the fact. that an important event was getting out of the way and the new president. it will pave the way for a new stimulus to the economy that markets have been waiting for.
“More than who wins the election, markets have risen with the expectation that the new president will come along and pave the way for new stimulus to the economy,” said Nilesh Shah, MD, Kotak Mahindra AMC.
There is a general feeling that while US policies towards India may not undergo much change despite a change in leadership in the US, there is a sense that a more predictable leader is better geopolitically and for world stock markets.
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“I think Biden is a much more predictable person, so the policies would be on the expected lines and that should bring more stability. Since equity markets are risk markets, if you can reduce volatility on the policy front and make it a little more predictable, it’s good for markets, ”said Raamdeo Agrawal, President of Motilal Oswal Financial Services.
It is important to note that on Tuesday, when it looked like Donald Trump was ahead in the race to 270, the markets also rose and on Wednesday and Thursday, when it emerged that Biden had a greater chance of securing the presidency, it rose again.
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“It wasn’t about who wins, what mattered was an undeniable victory for either candidate. On Wednesday, when it became clear that Biden will have an undeniable victory and the process will not have to go through great uncertainty, there was a huge surge in the markets. Now the gain is due to a smooth and stable transition, ”said CJ George, MD Geojit Financial Services. He further said that while Biden’s victory may mean more sensible and predictable policies, “a more stable geopolitical environment will be good for equity markets globally.”
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A look at how various sectors have traded over the past three days shows that banking and the TI index have been the main winners. Against a Sensex rise of 4.1 percent in the past three days, the banking index is up 7.8 percent and the IT index is up 3.9 percent. Many feel that Biden would be better for the industry and IT professionals. In fact, he had stated that once elected, he would lift the temporary suspension of H-1B visas. 📣 Express Explained is now on Telegram
Given the fact that Democrats have traditionally been softer on Pakistan and China, although there are some concerns about whether India would enjoy the same level of proximity that existed between Modi and Trump, some feel that, given that public sentiment in the US Not in favor of China, Biden will have no choice but to join with India to control China’s march. “It is an obligation of global politics,” Agrawal said.
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Even George said that while it will take some time for markets to understand the Democrats’ view of the Malabar exercise in which the four Quad countries, India, the US, Japan and Australia are participating this time, “I think it will continue. given the fact that public opinion is against China. “
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There is also a sense that a Biden victory will see the union of the global community, as Trump had withdrawn from various treaties and taken extreme positions on issues, including the Paris Agreement. The global community may come back together, as Trump had pulled out of several agreements, including the Paris Agreement on climate change.
There is also a sense that Trump’s departure can also reduce the level of polarization in American society and unite the country, which is good for the world and the markets.
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