All eyes are trained on the West as the US presidential election results remain too close to call. The outcome of the election and the choice of person occupying the Oval Office are likely to have widespread ramifications on both global economic and stock market trajectories while also shaping the contours of geopolitics. A red sweep, i.e., a Republican win, will almost certainly be noisier and more volatile leading to higher stock market uncertainty. For India, it could be tactically positive as China equities turn more volatile, and flows get directed towards India. On the other hand, a Democratic win will perhaps be neutral, having minimal impact on stock markets.

Highlights

• India remains a structural growth story that is well-positioned against peers to deliver enhanced long-term returns.
• An ideal way to treat the US election outcome is to look at it as an opportunity. A time to rebalance and reposition for long-term growth.
• The market is not reliant only on foreign flows as domestic flows continue to provide support to stock markets.
• External events and domestic developments will undoubtedly create short-term volatility.