If markets reflect the wisdom of the crowds, then the victory of Donald Trump, who trailed his rival Hillary Clinton in almost every pre-election survey, knocked the bottom off India’s equities. The 30-share benchmark Sensex shed 1,500 points, close to 4 per cent of its value at opening.
Earlier in the morning, a team led by analyst Saugat Acharya of ratings company ICRA had optimistically attributed a strengthening of the rupee against the dollar to “easing concerns over the results of the US elections (read a Clinton victory) boosted investors’ risk appetite”.
Watch: Trump receives concession call from Clinton
That risk appetite seems to have evaporated with a Trump victory, raising concerns about increased protectionism in America and curbs on immigration of Indian professionals. The former could lead to tighter norms for exports of generic Indian drugs to the US. The former could dent the bottom lines of India’s IT companies, already under pressure from shrinking margins.
There are other worries as well. “US farm policies and subsidies have devastated farmer livelihoods across the world. These will continue whoever is in the White House, but Trump might increase this support with his promises to boost American incomes,” says Ajay Vir Jakhar, founder of Bharat Krishak Samaj, a lobby group of progressive farmers.
