With Donald Trump getting shot during a Pennsylvania election rally, all eyes are on how the incident will affect the equity markets in India. The response of the US stock market on Monday will be reflected Dalal Street the following day due to time zone differences. However, the uncertainty and early morning trends in Asian indices could affect the market sentiments in India on Monday itself.
Market watchers feel that investors will seek refuge in safe haven assets like gold and debt and non-traditional assets like cryptocurrency as volatility is expected on Monday, according to Bloomberg. Bitcoin touched $61,000 on Monday while Ether also reported minor gains.
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The shooting is expected to bolster Trump's chances of winning in the November elections, as per commentators. The shocking incident could have an impact on stocks of private prisons as well as the credit card and health insurance sectors. The prospects of a strong dollar and higher US bond yields are also not ruled out.
The November elections have already made investors cautious as many fear that there could be a long-drawn dispute or violence similar to the 2020 elections when Trump challenged the poll results and the January 6 Capitol riots.
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Marko Papic, California-based chief strategist at BCA Research Inc, told Bloomberg that the shooting will likely improve Trump's chances. "I do think that the bond market should at some point, become aware of President Trump’s higher odds of winning the White House than any of his rivals. And I continue to believe that as his odds rise, so should the probability of a bond market riot,” he told the outlet.
Kyle Rodda, senior financial market analyst at Capital.com, told Bloomberg that he expects inflows into Bitcoin and gold. “This news marks a changing point in American political norms and the emergency of greater political violence. For markets, it means haven trades but more skewed towards non-traditional havens,” he added.
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Besides US trends and trading activity of foreign investors, quarterly earnings from key large cap companies will also the guide the market the week. Reliance Industries, Infosys, HDFC Life Insurance Company, Bajaj Auto, BPCL, JSW Steel and Asian Paints will release their Q1 results this week.
On Monday, the June data for domestic WPI inflation will be announced. Global economic data being released this week include China GDP, EuroZone CPI inflation and ECB policy. The US Fed chair speech will also influence market sentiments.
Markets will be closed on Wednesday on account of Muharram.
