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Nifty IT 33851.95 (1.13%)
Nifty Financial Services 17673.55 (-0.50%)
Adani Ports 710.15 (0.15%)
Asian Paints 3110.85 (-0.20%)
Axis Bank 764.70 (-1.18%)
B P C L 382.50 (0.08%)
Bajaj Auto 3497.20 (-0.11%)
Bajaj Finance 6867.25 (0.44%)
Bajaj Finserv 15198.75 (-1.05%)
Bharti Airtel 715.80 (1.21%)
Britannia Inds. 3509.65 (0.44%)
Cipla 932.25 (0.50%)
Coal India 161.65 (0.69%)
Divis Lab. 3940.70 (0.02%)
Dr Reddys Labs 4218.60 (-0.89%)
Eicher Motors 2610.95 (-1.24%)
Grasim Inds 1697.00 (0.59%)
H D F C 2516.50 (0.53%)
HCL Technologies 1080.45 (0.25%)
HDFC Bank 1463.25 (-0.79%)
HDFC Life Insur. 620.45 (-0.17%)
Hero Motocorp 2672.15 (-1.58%)
Hind. Unilever 2283.55 (-0.51%)
Hindalco Inds. 490.35 (0.25%)
I O C L 124.10 (1.14%)
ICICI Bank 781.15 (-1.70%)
IndusInd Bank 903.55 (1.74%)
Infosys 1686.20 (0.45%)
ITC 217.60 (1.40%)
JSW Steel 628.05 (0.31%)
Kotak Mah. Bank 1898.30 (0.48%)
Larsen & Toubro 1897.55 (-0.70%)
M & M 869.65 (1.35%)
Maruti Suzuki 8550.95 (-3.05%)
Nestle India 18384.40 (-0.01%)
NTPC 140.15 (3.81%)
O N G C 168.80 (1.87%)
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Shree Cement 24124.70 (0.68%)
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Sun Pharma.Inds. 827.35 (1.88%)
Tata Consumer 717.90 (1.69%)
Tata Motors 497.30 (0.59%)
Tata Steel 1084.65 (-0.34%)
TCS 3690.05 (1.12%)
Tech Mahindra 1410.65 (-2.42%)
Titan Company 2315.60 (0.24%)
UltraTech Cem. 7109.85 (0.13%)
UPL 790.25 (2.37%)
Wipro 552.15 (1.36%)

Do You Know sectors to Benefit from Joe Biden’s win?

Benefit from Joe Biden's Win
Sector Update
by Nikita Bhoota 11/11/2020

The markets have turned volatile in advance of the United States (U.S) election and continue to remain volatile post-election. The waves were felt not only in India but across the globe in the equity markets. Joe Biden is to be the 46th President of the U.S and it would certainly lift hopes of certain sectors back in India.

Certain industries that might get affected more than others with Biden’s victory.  Biden plans to spend roughly US $3.2 trillion over the next decade. His plan includes a spending budget of US $750 billion to improve healthcare and the US $750 billion to revamp education as per the media reports. The win of Joe Biden might not make any material difference in the long run, but in the near term.

We have gathered a list of sectors that are likely to benefit from Joe Biden victory as the U.S President.

Metal Stocks and Pharma stocks:

We expect metal stocks to benefit from Biden’s infrastructural push. Metal stocks could gain on the expectation of higher steel export to the U.S for additional infrastructure spending of ~$700-800 bn in the next 10 years.

The Indian Pharma sector is expected to benefit from the Biden win on the back of increased push for generic prescriptions and push to affordable health insurance. Biden plans to protect and strengthen The Affordable Care Act, which ensures a reduction in healthcare costs and access to health insurance for the U.S citizens. This implies more reliance on generic drugs and biosimilars, that would be positive news for Indian Pharma companies. As per the media reports, the U.S imports ~$7 billion worth of formulations from India annually. An increased scope for access to affordable health insurance would also boost the demand for generic drugs.

Electric Vehicle companies:

Biden in his campaign had made it clear that his administration’s focus will be on green energy. As per the media reports, Biden has promised $400 billion in public investment to transition to clean energy, including advanced battery technology and electric vehicles. Therefore, Shares of EV companies and the battery and the solar sectors would benefit from Biden’s win. Biden could also ease concerns about the trade war with China leading to a positive impact on global trade.

Real Estate, Financial Institutions:

A Biden win would mean a larger stimulus followed by additional means to improve healthcare access and other social welfare programs. Sectors that are likely to get impacted include real estate, financial institutions, student loans, etc.

Chemicals, Cement and IT sector

The Chemical sector which competes with China might have a positive impact as the U.S can take a tough stand against China. Similarly, the infrastructure push by Biden will benefit the cement industry.

The market experts have an opinion that visa restrictions for software engineers sent by Indian IT companies could ease. Trump has tightened norms for H-1B visas, mostly used by software services providers to send engineers for on-site work. That prompted IT companies to ramp up hiring local talent in the past three years, increasing costs in the market that contributes 50-65% of the revenue for India’s five largest IT firms. A Biden presidency is, however, seen to be less hostile to immigrants.

Conclusion:

U.S elections are likely to lead to short-term market swings that will be insignificant over the longer run.  Therefore, we recommend the investors to stick to their long-term strategy and stay focused on individual stocks.

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