Trump presidency: Experts prefer to stay in 'no-action' mode

Are Donald Trump’s US election promises just rhetoric or something investors across the world must learn to live with? Experts prefer no-action zone over three months, but answers will get clearer when he assumes office on Friday night India time (January 20). Promises of higher employment for locals and increased manufacturing in the US, if kept, will bother the Indian stock market. Add in Trump’s recent statement on border adjustment tax, and the pressure intensifies, as this could set back India’s information technology (IT) and health care stocks.

Why fear BAT?

• Border adjustment tax or BAT is a tax levied on imports into the US
• The charge is expected to create a level playing field for local manufacturers in the US

Impact of BAT on Indian pharma 

• Most Indian companies export their products to the US
• Levying BAT could make Indian medicines expensive in the US
• To remain competitive, Indian companies may have to take a hit on their operating margins

Why Trump could be tough on IT?

• Trump plans to increase local hiring in IT jobs and reduce work permit visas from India
• Mandatory increase in minimum wages will also add to cost pressures

TRUMP EFFECT
What’s hot, what's not

Preferred Stocks	Stocks to avoid
ONGC	Infosys
Petronet LNG	TCS
Gail	Tech Mahindra
L&T	Mindtree
Grasim	Glenmark Pharma
Vedanta	Lupin
State Bank of India	Aurobindo Pharma

Source: Analyst recommendations