US mid-terms may help D-Street break free from geopolitical overhang
The upcoming US mid-term elections will potentially influence global markets and trade policies. Investors are closely watching whether the outcomes will ease uncertainties regarding tariffs and immigration. The results could shape the policy dire...
.Analysts suggest that the focus should remain on domestic earnings growth and financial flows.
Mumbai: All eyes are on the US mid-term elections, with investors looking for signs on whether the outcome could ease global geopolitical uncertainties, a key factor for the outlook on equities.
The elections will determine which party controls the House of Representatives and the Senate for the remaining two years of US President Donald Trump's term.
"The midterm outcome could influence Indian markets through trade policy, global investor sentiment and currency movements," said Ravi Singh, chief research officer at Master Capital Services. "If Trump loses control of Congress, greater scrutiny of his tariff policies could ease some trade concerns. If Republicans retain control, existing trade and immigration policies may continue, keeping uncertainty elevated." Initial results are expected in India early on Wednesday morning as polling stations close across US time zones.
Historical data show that the Nifty has gained the most over one-, three- and six months after the US midterm elections.
Of the seven mid-term polls since 1998, the Nifty has gained five times each in a month, three and six months.
Madhavi Arora, chief economist at Emkay Global Financial Services, said a Democratic-controlled Congress could constrain Trump through legislative checks, but he would retain substantial authority over tariffs, immigration and foreign policy.
"Fiscal policy is likely to remain expansionary under either outcome, putting a floor under US bond yields," she said. She cautioned that the Iran conflict could re-escalate after the midterms, irrespective of the outcome.
The post-election policy direction will matter more than the election result itself, said Ankur Punj, managing director at Equirus Wealth. "Investors should avoid tactical allocation decisions based purely on the US political outcome and remain focused on domestic earnings growth, valuations and asset allocation. The real market drivers for India will be crude, US yields and FII flows," he said.
Which party is leading in the US mid term elections 2026? Here's what the polls are saying
