Pharma and IT sectors to Face the US poll aftermath


US election results aftermath may have implications for Pharma firms and India IT that acquire sizeable revenue from this country.

Hillary Clinton win may result in regulation of drugs price in the US, affecting the drug makers of India, believe analysts. This is because Clinton has focus in reducing the costs of medicine and so it may be reduced to a great extent was said by Kotak Mahindra Asset Management Co, Managing Director, Nilesh Shah.

On the other hand, a Trump win, may weigh on interest rate-sensitive sectors and the information technology in India. It is expected to impact as outsourcing business as a part comes from the US and Trump presidency does not support it, so rules may be tightened relating to outsourcing.

A Trump win may result in higher fiscal spending, and it may push the interest rates up in the US, informed Shah of Kotak. “This will impact US rate adversely in the sensitive sectors and in turn have an impact cascading on rate sensitive sectors,” he added.

However, it always depends on the new president’s actions, post the election, said Shah. All eyes are set fixed on the dollar, and any moves can weigh on the emerging market assets. It depends on the currency plays. In case dollar loses its steam, the equation will turn for the US institutional investors who will pull out from the markets, said KR Choksey Investment Managers Pvt Ltd, Deven Choksey.

“A Trump victory may usher an uncertainty period and lead to initial risk in markets. It is expected of the business magnate and TV producer to implement a program representing a rupture to uncertainty with regard to budget, trade and monetary policies,” said NN Investment Partners in a report on the world markets.

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