Donald Trump
Credit: Reuters File Photo
Bengaluru: Donald Trump’s return to the White House was cheered by the Indian stock markets with both BSE Sensex and Nifty rising by more than 1.1 per cent, driven by heavy buying of tech stocks. The Nifty IT index registered its biggest single session gain in over three months and emerged as the top sectoral gainer on Wednesday.
“The global markets experienced a relief rally following the US election results, reducing political uncertainty with Trump securing a strong mandate. This has led to strong risk-on sentiments, driven by expectations of tax cuts and increased government spending,” said Vinod Nair, Head of Research, Geojit Financial Services.
However, given Trump’s attitude to immigration, analysts are unwilling to hazard a guess on how his return will impact the intake of tech talent from India.
“On a short term basis, if immigrant policies are tightened, there might be an impact. However, one can only employ locally if there’s enough skillset, which is why Indian tech talent thrives in the states,” Krishna Vij, Vice President of TeamLease Digital said.
During his earlier term, in 2017, Trump had signed an executive order of ‘Buy American and Hire American: Putting American Workers First’ which sought to create higher wages and employment rates for U.S. workers and to protect their economic interests by rigorously enforcing and administering immigration laws.
However, owing to opposition from tech giants like Amazon, Microsoft and Google, Trump had softened its stance on tech immigration.
Experts also believe that Trump’s victory will prove beneficial for domestic IT companies due to expected tax breaks which will pump in more money and eventually increase tech budgets.
“Tech sector is expected to receive better business prospects from US based companies on the back of the President-elect’s approach to taxes. Musk could also make an entry in India with Starlink now that Trump is back in the picture which could potentially help the IT sector's communication segment,” said an independent market analyst who did not wish to be named.
Analysts believe that global capability centres (GCCs) might take centre stage if tech talent faces immigration issues as India’s skillset is highly valued. “In both the situations, it’s going to be a win-win for India’s tech sector,” added Vij.
IT industry association Nasscom said that it is looking forward to working closely with the new US administration to strengthen the dynamic tech partnership between the two nations. “US is the largest market for India's $254 billion tech sector where its overall contribution is $80 billion to US GDP,” it said in a statement on Wednesday.
However, commodity prices responded negatively to Trump’s return to office. While oil prices fell by more than 1%, precious metals like gold slid close to a three week low and copper fell more than 2%, becoming the worst performer among base metals.