Indians Raise Bets on American Stocks Ahead of US Presidential Elections

Business Standard Indians raise bets on American stocks ahead of US Presidential elections

Increased interest because of expected short-term volatility, say brokerages.

Domestic brokerages have seen clients raise bets on American stock markets in the run-up to the US presidential elections, results of which are awaited.

Some brokerages announced tie-ups to offer overseas stock market access to their clients in recent months, fuelling increased investment activity, even as volatility increased ahead of poll results.

Many younger customers look to invest in technology firms that they are familiar with but which are not available in India, said Prakarsh Gagdani, chief executive officer at 5paisa Capital. Companies like Facebook and Twitter are listed in the US. “We have started offering customers investment opportunities in US equities with zero commission since the last two months in partnership with Vested.

The traction has been very good.... We have seen steady demand and new customer queries for investing in US markets,” he said.

“There is increased interest in the markets on account of the expected shortterm volatility that elections typically cause... During the run-up to polling dates, we saw a 20-25 per cent increase in US investing among Indians. This was evident from the increase in enquiries as well the increase in smaller overseas remittances that we saw,” said Arun Chaudhry, head of online business and products, broking and distribution at Motilal Oswal Financial Services.

The Chicago Board Options Exchange Volatility Index (VIX) was higher than usual, at above 30, even as votes were being counted. The index is a measure of how sharply the stock market is expected to move. It is often called the stock market’s ‘fear gauge’.