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Market experts believe that Trump’s administration will prioritize American interests through tariffs and trade agreements
Prime Minister Narendra Modi with Donald Trump (PTI Photo/File)
Following the stock market decline ahead of Donald Trump’s swearing-in, Dalal Street and other global bourses are anxiously awaiting the economic outlook the new administration will unveil after the inauguration of the 47th US President. Investors are particularly interested in understanding the tariff policy of Trump’s administration and its approach to addressing geopolitical tensions, especially regarding the Russia-Ukraine war and issues in the Middle East. Trump’s stance on US inflation and the uncertain economic outlook will also be closely watched following his return to the White House.
The dollar remained firm, and Asia’s stock markets showed cautious optimism on Monday as investors awaited a series of policy announcements in the early days of Trump’s second presidency. There is also anticipation of a potential rate hike in Japan by the end of the week.
Trump is set to take the oath of office at noon Eastern Time (1700 GMT) and has promised a “brand new day of American strength” at a rally on Sunday. He has sparked expectations of issuing multiple executive orders immediately after taking office. In a display of his unpredictability, Trump launched a digital token on Friday, which soared to trade above $70 at one point, reaching a market value exceeding $15 billion.
Market experts believe that Trump’s administration will prioritize American interests through tariffs and trade agreements, which may put pressure on countries like China, Japan, South Korea, and Vietnam. However, nations like India, Indonesia, Malaysia, and Thailand could benefit if the US focuses on these interests. That said, Trump’s protectionist policies may impact the green energy initiatives of Asian countries. Experts expect Trump 2.0 to boost defense tech companies, but export-oriented companies could face challenges due to an anticipated tariff war.
Impact on Green Stocks: “If Trump maintains his protectionist policies, Asia’s transition to renewable energy could be hindered by his fossil fuel-friendly stance. While this might benefit US oil companies like Exxon Mobil in the short term, it could slow the broader adoption of green energy,” said Ross Maxwell, Global Strategy Operations Lead at VT Markets. As a result, India’s solar and other green energy stocks are expected to face pressure next week.
Advantage for Defense Stocks: “While Asia’s economies may experience volatility due to trade wars and tariffs, sectors such as defense and tech could thrive. Therefore, Trump 2.0 is expected to drive demand for defense and tech-enabled defense stocks in the short term,” added Maxwell. Anshul Jain, Head of Research at Lakshmishree Investment and Securities, emphasized the potential of tech-enabled defense stocks, such as drone and aerospace companies, over traditional defense stocks.
Pressure for Export-Oriented Companies: Anshul Jain also noted that Trump’s protectionist tariff policy is likely to challenge export-oriented sectors such as textiles and IT. He advised against making fresh investments in large-cap IT and other export-oriented companies.
Opportunities for Fintech Stocks: “Trump’s stricter immigration policies may keep more tech talent in Asia, fostering innovation hubs in countries like India, Singapore, and South Korea. This shift could benefit fintech companies,” said Maxwell. Investors are advised to stay alert to the movement in fintech stocks when the market opens next Monday.
Opportunities for Infrastructure and Rail Stocks: “As Trump’s decoupling from China continues, companies are likely to shift production to India, Vietnam, and Indonesia. India, in particular, could see accelerated growth as a manufacturing hub if trade barriers with China persist. This will likely increase demand for infrastructure, transportation, and logistics, especially rail logistics. As a result, infrastructure and rail stocks are expected to remain under investor focus in the near term,” said Anshul Jain of Lakshmishree Investment and Securities.
Crude Oil: A stronger US dollar makes commodities priced in greenbacks, like oil, more expensive for holders of other currencies, thereby reducing demand.
“Trump’s win is bullish for the oil market in the short term, due to the expectation of tighter sanctions on Iranian oil. However, in the long term, it could be bearish as his policies are likely to support the US oil and gas industry, while trade protectionism may lead to weaker demand,” said Soni Kumari, commodity strategist at ANZ Research, according to Reuters.
In his first victory speech, Trump stated, “Leave the oil to me. We have more liquid gold – oil and gas – than any country in the world.”
US crude settled down 1 per cent for the day at $77.88 a barrel. Brent settled at $80.79 per barrel, off 0.62 per cent.
Gold: International gold and silver prices are in the negative territory, ahead of Donald Trump taking over the charge of the US presidency. An fall in the rupee due to stronger dollar might make the cost of gold higher for Indians.
On the MCX, gold is trading lower by 0.14 per cent at 78,915 per 10 grams, while silver is down by 0.16 per cent.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
