The brokerage anticipates that the upcoming midterms will likely break unified Republican control in Congress as Democrats show strong prospects of winning the House. Even with legislative gridlock, President Donald Trump is projected to retain broad executive discretion over tariffs and immigration policies. Furthermore, while historical midterm trends often boost the S&P 500, current economic conditions may prevent a standard rally, leaving Indian indices vulnerable to balance-of-payment risks tied to elevated fuel prices.
Key points
Indian markets like the Nifty and Sensex are primarily susceptible to external commodity…: Indian markets like the Nifty and Sensex are primarily susceptible to external commodity shocks rather than U.S. political reconfigurations.
A combination of softer crude prices, reduced Treasury yields, and a declining dollar is…: A combination of softer crude prices, reduced Treasury yields, and a declining dollar is necessary to support domestic equities.
Past market cycles delivering post-midterm S&P 500 rallies may fail to repeat due to less…: Past market cycles delivering post-midterm S&P 500 rallies may fail to repeat due to less favorable underlying economic fundamentals.
Sources checked by our analysis pipeline: 1
The outcome of the November 2026 US midterm elections could have significant geopolitical and market implications for India, although the impact on domestic equities may be felt more through movements in crude oil prices, the dollar and US bond yields than through a direct shift in US policy towards New Delhi.
Emkay Global Financial Services expects familiar trade and immigration-related frictions between India and the US to persist even if Democrats gain control of Congress. While a Democratic majority could increase scrutiny of President Donald Trump's tariff and immigration policies, it is unlikely to substantially limit his executive powers. For Indian markets, the bigger concern is the possibility of a renewed escalation in the Iran conflict after the elections, which could push crude oil prices higher, worsen India's balance of payments (BoP) position and put pressure on the rupee and equities.
The brokerage believes that a decline in the dollar, US Treasury yields and crude oil prices would be supportive of Indian equities. However, it cautions that the geopolitical backdrop could turn less favourable, with a possible escalation in the…
Investor sentiment remained resilient as the pharmaceutical major's underlying business displayed healthy expansion despite heavy exceptional litigation and acquisition charges. Steady double-digit revenue growth across core geographies and robust innovative medicine sales cushioned the bottom-line blow. Market analysts view the operational fundamentals as intact, projecting significant upside potential based on pipeline developments.
The central government adjusted its export windfall levies to safeguard domestic fuel availability amid global crude surges fueled by tensions in West Asia. Higher duties on diesel and aviation turbine fuel threaten to squeeze refining export realisations, while the full waiver on petrol exports offers modest respite. These changes will heavily influence trading sentiment for major state-run energy refiners as markets digest the impact.
Indian benchmark indices showed defensive strength on Friday as institutional investors favored select large caps in IT, healthcare, and pharmaceuticals over riskier assets. This divergence occurred as broader market segments endured steep selling driven by surging crude oil prices and ongoing worries regarding global inflation. The resulting domestic turbulence mirrors an international retreat triggered by heavy technology selloffs in both the United States and Europe.