US presidential poll:Biden good for emerging markets; dollar to gain from Trump win

On his part, Biden aims to rebuild global alliances and intends to obtain concessions from China on intellectual property and open markets, but via a coalition of international entities and following diplomatic norms. Analysts at UBS estimate an 8 per cent earnings loss to S&P500 in 2021/22 through potential tax raise under Biden's agenda. In the short-term, they believe this could boost the relative attractiveness of Asian equities, pushing the already inexpensive relative price-earnings (PE) of Asia to the US to the lowest levels since 2005.

Over the past few days, Biden’s lead over President Trump has widened in key states (Pennsylvania, Michigan and Wisconsin) that Trump narrowly won in 2016, according to Reuters/IPSOS opinion poll released Sunday. On an overall basis, Biden's approval ratings, as per reports, now stand at 51.5 per cent compared to 43.4 per cent for Trump.

In case of Trump re-election, analysts prefer to remain overweight on gold and commodities in the backdrop of higher growth and slightly higher geopolitical uncertainty.

“A second-term Trump would continue the current policy positions, with the ‘America First’ policy likely to remain in place. Tensions between the US and China would likely continue, but with less focus on tariffs, and more emphasis on Hong Kong, equity flows, and technology. In this context, we prefer US value stocks and Japanese equities to US growth stocks and Chinese equities,” experts opinied.

The third possibility is a delayed election outcome due to the mail-in voting, which will keep the global financial markets volatile. Any market correction, analysts say, would be an attractive entry point for risky assets, which should do well over the medium-to-long term.