What does Donald Trump’s second term mean for Indian stock market? EXPLAINED with five crucial points | Stock Market News

Trump 2.0: After the stock market crash ahead of Donald Trump’s swearing-in date, Dalal Street and other bourses of the global markets would be anxiously waiting for the economic outlook that the new administration unveils post-inauguration of the 47th US President. Investors would be keen to know the tariff policy of Donald Trump’s administration and the road map to contain geopolitical tension, especially in the Russia-Ukraine war and the Middle East region. However, Donald Trump’s policy on US inflation and the uncertainties around the US economy will also be a significant attraction after his re-entry to the White House.

According to stock market experts, the market believes the Donald Trump administration will prioritize American interests with tariffs and trade agreements. This may challenge countries like China, Japan, South Korea, and Vietnam. India, Indonesia, Malaysia, and Thailand might benefit if Donald Trump prioritizes these US interests. However, this protectionist policy of the Trump 2.0 administration may dent Asian countries’ green initiatives. They said that Trump 2.0 is expected to boost defence tech companies, but export-oriented companies may face challenges caused by the expected tariff war.

Trump 2.0: Top 5 points

Here we list out the top five crucial points that investors of the Indian stock market may like to know ahead of Donald Trump’s swearing-in date:

1] Dent to green stocks: “Due to the expected escalation in the tariff war, if Donald Trump sticks with his protectionist policy, Asia’s energy transition to renewables could be complicated by Trump’s fossil fuel-friendly stance, which may temporarily benefit US-based oil companies like Exxon Mobil but hinder broader green energy efforts,” said Ross Maxwell, Global Strategy Operations Lead at VT Markets.

So, India’s solar and other green energy stocks are expected to come under pressure next week.

2] Advantage for defence stocks: “Asia’s economies may face volatility due to Trump’s trade wars and tariffs, but some sectors—like tech and defence could thrive. So, Trump 2.0 is expected to fuel buying in defence and tech-enabled defence stocks in the near term,” said Ross Maxwell of VT Markets.

Speaking on the advantages for Indian defence companies, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, said, “Rather than looking at traditional defence stocks, one should look at buying tech-enabled defence stocks like drone and aerospace stocks.”

3] Pressure for export-oriented companies: Expecting pressure for export-oriented segments, Anshul Jain said, “Donald Trump’s protectionist tariff policy is expected to pose a challenge for export-oriented segments like textile, IT, etc. However, one should avoid taking any fresh position in large-cap IT and other export-oriented companies.”

4] Advantage for fintech stocks: “Donald Trump’s stricter immigration policy may lead to more tech talent staying in Asia, boosting regional innovation hubs in countries like India, Singapore, and South Korea. This shift may also benefit fintech companies,” said Ross Maxwell of VT Markets. So, one is advised to remain vigilant about the fintech stocks when the market re-opens on Monday next week.

5] Advantages for infra rail stocks: “In the wake of Donald Trump’s decoupling with China, companies will likely shift from China to India, Vietnam and Indonesia. India could see accelerated growth as a growing manufacturing hub if trade barriers with China persist. So, this will likely create demand for infrastructure, transportation, and logistics, especially rail logistics. So, infra and railway stocks are expected to remain under the bulls’ radar in the near term,” said Anhsul Jain of Lakshmishree Investment and Securities.

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.