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Donald Trump Wins US Presidential Election: While the rupee fell to an all-time low, the domestic equities markets and cryptocurrencies saw a sharp rise. However, gold and crude oil prices have also fallen.
While Donald Trump’s policies present both risks and opportunities, they are likely to create a cautious outlook for the global economy.
As Donald Trump has secured a historic win in the US presidential election 2024, crude oil, equities, gold, bitcoin and the rupee have reacted sharply presenting a mixed response for India. While the rupee fell to an all-time low, the domestic equities markets and cryptocurrencies saw a sharp rise. However, gold and crude oil prices have also fallen.
Donald Trump has become the 47th president of USA with a big margin (219-266).
Indian Stock Market Surges
Indian equities markets saw a sharp recovery in the second half on Tuesday following short-covering amid hopes of Donald Trump’s victory in the US elections 2024. Today, Wednesday, after he won the battleground state of Pennsylvania, the NSE Nifty surged to the day’s high of 24,537.6 and the BSE Sensex jumped over 1,000 points to 80,569.73.
Rupee Hits Record Low
The Indian rupee on Wednesday hit its all-time low of 84.25 to a dollar due to a rise in the greenback amid the US presidential elections. Analysts say Donald Trump’s victory in the US is likely to affect the rupee adversely as his inflationary policies might push up the dollar.
The dollar index rose to its 4-month high of 105.12 as Donald Trump secured a clear mandate.
Global Gold, Silver Prices Fall
International gold and silver prices are in the negative territory, weighed by a strong US dollar as Donald Trump wins the US presidential election with a bigger margin. However, a fall in the rupee due to stronger dollar might make the cost of gold higher for Indians.
“On chart, gold prices have hit crucial support at Rs 77,500 on MCX and around $2,700 on international spot. We expect more correction only if the given supports are breached and sustained, failing to which prices may again resume its upward journey. Resistance is seen at Rs 78,000 on MCX and $2,755 in international spot,” said Pranav Mer, Vice President, EBG – Commodity & Currency Research, JM Financial Services.
Crude Oil Prices Ease
Brent crude oil prices on Wednesday declined by 2.09 per cent to $73.95 per barrel on a stronger dollar. A stronger US dollar makes greenback-denominated commodities such as oil more expensive for holders of other currencies, in turn curbing demand.
“Trump’s wins is bullish for the oil market in the short-term due to prospects of tighter sanctions on Iranian oil. However, in the longer-term, it could be bearish as Trump’s policies will be supportive for the US oil and gas industry, while trade protectionism may result in weaker demand,” said Soni Kumari, commodity strategist at ANZ Research, according to Reuters.
In his first victory speech, Trump said, “Leave the oil to me. We have more liquid gold – oil and gas – than any country in the world.”
Bitcoin Prices Hits All-Time High
Bitcoin on Wednesday crossed the $75,000-mark to hit its all-time high of $75,011.06, supported by significant inflows into exchange-traded funds (ETFs) amid reports of Donald Trump’s gains in the US presidential elections.
“As a vocal advocate for crypto, Donald Trump’s win could signal a promising future for the industry,” said Balaji Srihari, business head of CoinSwitch.
Apart from these, the US 10-year bond yields also rose to 4.45 per cent.
How Will Donald Trump’s Win Impact India?
“While Trump’s policies present both risks and opportunities, they are likely to create a cautious outlook for the global economy,” said Ross Maxwell, global strategy operations lead, VT Markets
Trump’s protectionist stance — potentially imposing heavy tariffs on imports — could have wide-reaching effects, particularly on emerging markets that rely heavily on trade with the US. India, in particular, may face challenges from a stronger dollar, leading to capital outflows and inflationary pressures, he said.
“Additionally, Trump’s strict immigration policies could negatively affect India’s tech industry, which depends on the free movement of skilled labour,” Maxwell added.
That said, Trump’s first term fostered good relations with India, and his view of China as a security threat may lead to efforts to counterbalance China’s influence in Asia, which could benefit India. Opportunities in defense, tech, and the expansion of Indian exports in sectors like pharmaceuticals and IT services may arise, said Maxwell.
