India Shriram Research Shows Markets Stand Out After US Midterm Polls

Following the US midterm elections, India has emerged as a distinct standout among emerging markets, according to an analysis by Shriram Research. The post-election period saw the Nifty advance by 6.8 per cent, while the Indian rupee strengthened by 1.1 per cent to finish at ₹93.81 against the US dollar by November 6. Additionally, the country experienced a 12.5 basis point drop in its 10-year government bond yield and a 17.1 basis point decline in the two-year yield.

Shriram Research attributed this positive market performance primarily to lower crude oil prices and a broader shift in capital away from artificial intelligence-linked equities in the United States, South Korea, and Taiwan toward Chinese and Indian markets. Between November 2 and November 6, the Nasdaq 100 fell 3.6 per cent, while South Korea's KOSPI and Taiwan's TAIEX dropped 13.6 per cent and 11.6 per cent respectively. Meanwhile, the Hang Seng in Hong Kong rose 4.7 per cent.

India emerges as a standout emerging market following US midterm election results with strong gains.

The report also highlighted that the Democratic Party's victory in both chambers of the US Congress raised concerns regarding potential regulations and moratoriums on data centre development, particularly after the party's success in Texas and Georgia. Such restrictions could prompt global hyperscalers to diversify their investments. India's data centre capacity is projected to scale up nearly fivefold to reach 7.5 gigawatts by 2030, which involves an estimated financial outlay of around $36 billion.

Furthermore, the country's tax holidays, affordable power supply, engineering talent pool, and proactive government measures to draw hyperscalers position it well to capture redirected investments. However, Shriram Research cautioned that these market advances remain contingent upon de-escalation between the US and Iran, noting that crude oil prices rebounded following an initial post-election drop.

Why it matters The shift in global investment patterns and potential US regulatory hurdles for data centres directly impact technology and financial sectors, presenting new growth avenues for India's digital infrastructure and broader economic landscape. Investors and market participants will need to monitor geopolitical developments and energy prices closely.