Can a US shutdown trigger a knee-jerk reaction in Indian stock market? Experts weigh in
US government shutdown looming: What is it? Check which services will likely be suspended The US shutdown will impact several departments of the US government, including education, healthcare and law and order even though some highly essential government entities will continue to function. Some of the key economic data, including monthly unemployment figures and price reports, would be temporarily suspended in case of a shutdown, affecting market sentiment and possibly leading to investor uncertainty. Also Read: US economy shows resilience, but is soft landing a strong possibility? The impact of a US shutdown could be significant on its economy but is unlikely to trigger a knee-jerk reaction in the domestic market, experts say.
(Exciting news! Mint is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) Many analysts think that the US will avoid a shutdown and the market will not see a major reaction to it. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services underscored news of the US Federal government shutdown has always been hot news leading to a lot of anxiety and concerns.
However, Vijayakumar says historically, it has been seen that the Republicans and Democrats reach an agreement at the eleventh hour. "History will repeat this time also. Markets will ignore this," said Vijayakumar.
Also Read: Global economic slowdown may not significantly impact India, says Amitabh Mohanty of JM Financial Mutual Fund G. Chokkalingam, Founder and Head of Research at Equinomics Research pointed out that a shutdown wouldn’t make any significant impact on the Indian markets. "As it is related only to government organisations and their
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