Trump is Back: What Does It Mean for the Indian Markets? | Weekly Update November 8th

Hello Readers!

Trump made a historical return and everybody can’t stop talking about it. And while this has already shown a promising future for those like Elon Musk, many are wondering what this means for the Indian markets. So, let’s dive in and find out … right after some market highlights

🧾In this Article

Weekly Market Wrap-up

Quick Bites

Stocks in News

Sustainability News

Earnings Corner

IPO Corner

Cover Story: Trump is Back: What Does It Mean for the Indian Markets?

Key Events

📈 Weekly Market Wrap-up

Even amidst the festive cheer, Sensex closed the week at 79,486.32, down 0.1% and Nifty closed the week at 24,148.20, down by 0.2%.

Sector Spotlight

The week concluded with a mixed performance across major sectors on the BSE. The IT index led the gainers, closing at 41,975.89, up 1,461.89 points or 3.61%. The Consumer Durables index followed suit, ending at 61,648.78, up 498.15 points or 0.81%. However, the FMCG index experienced the steepest decline, closing at 21,408.62, down 367.16 points or 1.69%. The Capital Goods index also witnessed a decline, ending at 69,479.43, down 98.41 points or 0.14%. The Healthcare index closed marginally lower at 44,050.85, down 46.74 points or 0.11%.

Nifty 100 Top gainers

• Mahindra & Mahindra Ltd. = 2,974.90 (+9.0%)

• Punjab National Bank = 104.79 (+7.0%)

• Apollo Hospitals Enterprise Ltd. = 7,421.40 (+5.7%)
  
• JSW Energy Ltd. = 712.05 (+4.8%)
• Tech Mahindra Ltd. = 1,681.35 (+4.5%)

Nifty 100 Top losers

• Trent Ltd. = 6,298.95 (-11.6%)

• Coal India Ltd. = 424.05 (-6.2%)

• Asian Paints Ltd. = 2,769.45 (-5.7%)

• Grasim Industries Ltd. = 2,544.85 (-5.6%)

• Hindalco Industries Ltd. = 650.45 (-5.2%)

FII and DII Activity:

Yet again, Foreign investors continued to pull out by selling a whopping 19,636.60 crores over the past week while domestic investors kept investing, buying 14,391.51 crores in equities.

Global Gossip

Global stock markets saw a mixed performance this week, with several indices showing notable gains, while others experienced declines. The Dow Jones Industrial Average rose by 1,954.53 points, or 4.65%, closing at 44,006.72, while the Nasdaq surged 1,047.73 points, up 5.74%, finishing at 19,287.65. The S&P 500 also posted a solid gain of 268.39 points, or 4.68%, ending at 5,997.19. However, European markets faced some challenges, with the FTSE 100 falling by 291.61 points, or 3.49%, to 8,072.39, and the DAX dropped 398.86 points, or 2.03%, finishing at 19,215.48. The CAC also experienced a decline, dropping 291 points, or 3.81%, to close at 7,338.67. In Asia, the Nikkei rose by 1,446.70 points, or 3.80%, to 39,500.37, while the Hang Seng advanced 221.76 points, or 1.08%, ending at 20,728.19. The Shanghai Composite saw the largest gain, climbing 180.29 points, or 5.51%, to close at 3,452.30.

Rupee Report

This week, the Indian Rupee (INR) showed minimal movement against the US Dollar (USD). The USD/INR pair opened at 84.033 and closed at 84.037, reflecting a marginal increase of just 0.004 points. Despite this slight movement, the rupee maintained a steady range, suggesting limited volatility in the currency pair for the week.

Gold Dips

Gold prices saw a slight decline this week, closing at $2,747.60, down 1.34% from the previous week. While the price fluctuated within a day’s range of $2,680.82 to $2,709.94, the overall weekly trend remains negative. Over the past 52 weeks, gold has seen a significant rise, with the lowest point at $1,811.03 and the highest at $2,709.94

🍟 Quick Bites

💰 The UK’s central bank has reduced its key interest rate to 4.75% in its November meeting, down from 5%.

📊 China’s trade surplus rose to $95.27 billion in October, up from $81.71 billion in September, with exports rising 12.7% and imports falling 2.3% year-on-year.

✈ The Royal Brunei Airlines has begun a direct flight from Chennai to Brunei starting 5 November, marking its return to India after suspending Kolkata flights post-September 2001.

📈 India’s composite PMI (manufacturing + services) rose to 59.1 in October, up from 58.3 in September, indicating growth in both sectors.

🌏 India ranked 83rd in the Henley Passport Index 2024, with visa-free access to 58 countries, while Singapore topped the list with access to 195 countries.

🏭 India’s final manufacturing PMI rose to 57.5 in October, up from 56.5 in September, indicating growth in the manufacturing sector.

🔎 Stocks in news

💻 TCS has signed a 30-year deal with Air France-KLM to improve its digital infrastructure.

🚆 RVNL has received an ₹837.67 crore order from Eastern Railway under the RVNL-SCPL joint venture.

🤖 HCL Tech has partnered with the Singapore Economic Development Board to open a new AI/Cloud Native Lab in Singapore in 2025, which will be the company’s 5th lab in its global network.

Earnings corner

💼 M&M reported a 35% year-on-year rise in net profit to ₹3,171 crore for the July-Sept quarter.

📈 Trent reported a 44.31% year-on-year rise in net profit to ₹338.75 crore for the July-Sept quarter.

🏨 Indian Hotels reported a 232% year-on-year rise in net profit to ₹555 crore for the July-Sept quarter, which included an exceptional gain of ₹307.4 crore from the full acquisition of Taj SATS.

📉 RVNL reported a 27.24% year-on-year fall in net profit to ₹286.88 crore for the July-Sept quarter.

🔻 Linde India reported a 2.12% year-on-year fall in net profit to ₹106.42 crore for the July-Sept quarter.

🚗 Escorts Kubota reported a 54% year-on-year rise in net profit to ₹324.23 crore for the July-Sept quarter.

⚡ Power Grid reported a 0.31% year-on-year rise in net profit to ₹3,793 crore for the July-Sept quarter and declared a dividend of ₹4.50 per share, with a record date of 14 November.

🏗 Tata Steel reported a net profit of ₹833.45 crore for the July-Sept quarter, compared to a net loss of ₹6,196.24 crore in the same quarter last year.

🏥 Apollo Hospitals reported a 62.64% year-on-year rise in net profit to ₹379 crore for the July-Sept quarter.

🏭 Jindal Steel reported a 37.97% year-on-year fall in net profit to ₹860.90 crore for the July-Sept quarter.

⬇ Titan reported a 23.10% year-on-year fall in net profit to ₹704 crore for the July-Sept quarter.

💊 Mankind Pharma reported a 29% year-on-year rise in net profit to ₹659 crore for the July-Sept quarter.

💉 Dr Reddy’s reported a 15.18% year-on-year fall in net profit to ₹1,255.30 crore for the July-Sept quarter.

🚢 Mazagon Dock reported a 75.76% year-on-year rise in net profit to ₹585 crore for the July-Sept quarter.

🎨 Berger Paints reported a 7.54% year-on-year fall in net profit to ₹269.66 crore for the July-Sept quarter.

💧 SJVN reported a 0.34% year-on-year rise in net profit to ₹441.14 crore for the July-Sept quarter.

🚂 IRFC reported a 4.41% year-on-year rise in net profit to ₹1,612.65 crore for the July-Sept quarter and declared a dividend of ₹0.8 per share, with a record date of 12 November.

⚙ ABB India reported a 21.38% year-on-year rise in net profit to ₹440.45 crore for the July-Sept quarter.

🚲 Tube Investments reported a 7.52% year-on-year fall in net profit to ₹167.80 crore for the July-Sept quarter.

🚆 IRCTC reported a 4.48% year-on-year rise in net profit to ₹307.87 crore for the July-Sept quarter and declared a dividend of ₹4 per share, with a record date of 14 November.

🔋 Exide Industries reported a 14.15% year-on-year fall in net profit to ₹231.28 crore for the July-Sept quarter.

Sustainability News:

⚡ NTPC’s board has approved an investment of around ₹80,000 crore to increase the capacity of its super-thermal power projects in Telangana, Bihar, and MP by 6,400 MW.

🔋 NTPC will form a joint venture with RUVNL to operate the 2,320 MW Chhabra thermal power plant in Rajasthan.

💥 Solar Industries has received an ₹887 crore order from Singareni Collieries for the supply of explosives and initiating systems over a period of 2 years.

🚀 IPO corner

Subscriptions:

• 🍽 Swiggy’s IPO has been subscribed 3.59 times

• ☀ ACME Solar Holdings’ IPO has been subscribed 2.75 times

• 💻 Sagility India’s IPO was subscribed 3.20 times

Upcoming IPOs:

• Neelam Linens and Garments (India) Ltd IPO (Nov 08, 2024 – Nov 12, 2024)

• Mangal Compusolution Limited IPO (Nov 12, 2024 – Nov 14, 2024)

• Avanse Financial Services Limited IPO (Nov 12, 2024 – Nov 14, 2024)

• NTPC Green Energy Limited IPO (Nov 12, 2024 – Nov 14, 2024)

• Onyx Biotec Limited IPO (Nov 13, 2024 – Nov 18, 2024)

• Zinka Logistics Solution Limited IPO (Nov 13, 2024 – Nov 18, 2024)

News:

✅ The National Stock Exchange of India (NSE) is awaiting a ‘No Objection Certificate’ from its regulator, SEBI (Securities & Exchange Board of India), before it can file the Draft Red Herring Prospectus (DRHP) for its Initial Public Offer (IPO), according to a senior official on Friday.

Trump is Back: What Does It Mean for the Indian Markets?

As the 2024 US Presidential Election results begin to unfold, market sentiment is already reflecting optimism about the possibility of Donald Trump returning to the White House. The Indian stock market, particularly the benchmark indices like Sensex and Nifty 50, surged over 1% following reports suggesting Trump could win the race, signaling confidence in his economic policies. But while this may be good news for some sectors, it’s essential to understand the broader implications of a potential Trump re-election, particularly for the Indian markets. Here’s a breakdown of the key factors you should consider.

1. Impact on Interest Rates and FPI Flows

One of the most significant concerns for emerging markets like India is the potential slowdown in interest rate cuts by the US Federal Reserve. Trump’s re-election could mean continued inflationary pressures in the US, potentially delaying the Fed’s rate-cutting cycle. This scenario could impact foreign portfolio investment (FPI) flows into India.

When US interest rates rise or remain high, investments in emerging markets tend to become less attractive because investors often seek higher returns in safer US assets. This could lead to capital outflows from India, which would put downward pressure on Indian stock prices. Moreover, a delayed rate cut could strain India’s own monetary policy, as the Reserve Bank of India (RBI) may struggle to balance the need to support economic growth with managing domestic inflation.

2. Trade Relations and Protectionist Policies

Donald Trump is known for his protectionist stance, and his return to power may mean higher tariffs and trade restrictions, particularly targeting countries like China. While this could benefit India in some areas, such as creating opportunities for Indian exports, it could also have a downside.

India’s tech and pharmaceutical industries, in particular, could feel the impact of higher tariffs on their exports to the US.

Trump’s ‘America First’ policies may lead to reduced demand for Indian IT services, as a slowdown in the US economy could decrease discretionary spending, impacting demand for outsourcing services. Similarly, Indian generic drug manufacturers may face higher tariffs on exports to the US, which could affect profit margins and growth in the pharmaceutical sector.

However, Trump’s protectionism might also trigger shifts in global supply chains. With many companies looking to reduce their reliance on China, India could become an attractive destination for businesses seeking alternatives. Analysts predict that India’s large domestic market and ongoing reform efforts make it well-positioned to benefit from these shifts.

3. China Relations: A Geopolitical Opportunity for India

Trump’s tough stance on China is unlikely to soften during his second term, which could create more opportunities for India.

The global supply chain has already been shifting away from China, and under Trump’s leadership, this trend could accelerate.

For India, this shift could present significant opportunities. As global companies look to diversify their supply chains away from China, India, with its large consumer market and improving infrastructure, could attract more foreign investments. Sectors like manufacturing, defense, and technology could be key beneficiaries. For instance, India’s growing role in global value chains, especially in sectors such as pharmaceuticals and IT services, positions it as a strategic alternative to China.

Moreover, India’s defense sector could also see opportunities if the US continues to view China as a security threat. Strengthening defense ties with the US could lead to increased investments and trade in India’s defense and aerospace sectors.

4. Geopolitical Tensions and Global Market Reactions

Another important factor to consider is Trump’s approach to global geopolitical tensions. He has expressed an interest in resolving conflicts like the Russia-Ukraine war by leveraging his relationships with world leaders, including Russian President Vladimir Putin. If Trump’s diplomatic efforts lead to a de-escalation of global conflicts, it could ease some of the market uncertainties that have weighed on investor sentiment.

In this context, Indian markets could benefit from reduced geopolitical risks. A more stable global environment could encourage investors to take on more risk, which would likely have a positive impact on emerging markets, including India.

Trump’s support for US allies, such as Israel and Taiwan, also signals a continuation of strong military and economic backing for countries in the region, including India, which could further solidify its position as a key partner for the US.

Conclusion: Risks and Opportunities Ahead

In summary, Trump’s potential return to the White House presents a mixed bag of opportunities and risks for the Indian stock market. On the one hand, India could benefit from increased supply chain shifts, continued demand for its services, and a favorable geopolitical environment. On the other hand, the prospect of slower interest rate cuts, higher trade barriers, and protectionist policies could pose challenges for some sectors.

As an investor, it’s crucial to stay informed about these developments and monitor how Trump’s policies unfold. While his economic approach may create growth opportunities, it’s important to be mindful of the risks, particularly in sectors like IT and pharmaceuticals, which could face turbulence under his administration. As with any major political shift, volatility is to be expected, but with the right strategy, India can navigate these changes and continue to attract global investors.

Upcoming key financial events for the week: