Image Source : PTI/AP Donald Trump’s inauguration and its possible impact on the Indian stock market.
Donald Trump inauguration: The trajectory of Indian stock markets this week is expected to hinge on Donald Trump’s second-term swearing-in as US President and subsequent policy announcements, alongside activities of Foreign Portfolio Investors (FPIs), according to market experts. Marking his return to the White House, Trump will formally assume office as the 47th President of the United States on Monday (January 20). Analysts expect that his trade policy decisions, including previously mentioned reciprocal taxes on Indian products, could significantly impact global trade dynamics. Such measures, if implemented, could trigger a sharp correction in Indian equity markets.
Pravesh Gaur, Senior Technical Analyst at Swastika Investmart Ltd., said that global attention is on Trump’s trade tariffs and their impact on global trade, which could have ripple effects on Indian markets.
Domestic triggers: Quarterly earnings and budget focus
In India, quarterly earnings announcements from corporate giants like HDFC Bank, ICICI Bank, BPCL, Hindustan Unilever, Dr Reddy’s, UltraTech Cement, JSW Steel, and others are set to influence market trends. As the earnings season progresses, investor focus will also shift to the upcoming Union Budget, which is expected to outline the government’s economic and fiscal priorities for the year. Ajit Mishra, Senior Vice President-Research at Religare Broking Ltd., noted, “The market is likely to adopt a cautious stance, with a mix of domestic and global factors driving sentiment.”
Market sentiment remains watchful
Last week, the BSE Sensex fell 759.58 points (0.98%), while the NSE Nifty dipped by 228.3 points (0.97%), reflecting cautious investor sentiment. With FPIs and domestic institutional investors (DIIs) taking opposing stances, market volatility is expected to persist. Siddhartha Khemka, Head of Research-Wealth Management at Motilal Oswal Financial Services, said that ongoing third-quarter earnings and management commentary will be key drivers of market activity. Additionally, policy announcements post-Trump’s swearing-in will shape global market sentiment.”
Sectoral outlook and global cues
Crude oil prices and the rupee’s performance against the dollar will also be critical external factors influencing market trends. Sector-wise, companies in consumer goods, banking, and petroleum are expected to be under the spotlight this week. As investors await clarity on global trade policies and domestic budgetary measures, the markets are likely to tread cautiously, balancing optimism with vigilance.
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