InvestorQ : Can you tell me how the Georgia election of 2 seats is relevant to Indian markets? I heard all TV channels saying that markets fell on Wednesday due to the Georgia election outcome?
Arti Chavan made post

Can you tell me how the Georgia election of 2 seats is relevant to Indian markets? I heard all TV channels saying that markets fell on Wednesday due to the Georgia election outcome?

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diksha shah answered.
3 months ago
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An interesting question but let me explain. Like the other large democracies, the US Congress also has two houses viz. the House of Representatives and the Senate. Normally, the government is able to have full control over decision making only if it has majority in both the houses of the Congress.

In the case of the Biden government, they already had a majority in the House of Representatives and they needed a majority in the Senate to have full control. That was predicated on the two seats in the state of Georgia. If Democrats won both seats then it would be a tie with Kamala Harris getting the decisive vote. That is tantamount to a Democrat majority in the Senate, which is what it turned out to be.

Now, you may ask, what is wrong with this outcome? There is a reason. One of the reasons US stocks rallied in the last 4 years was that Trump had given away billions of dollars by way of tax cuts to American corporates. Biden has been a strong opponent of that move. Now markets are apprehensive that the Democrats getting majority in both houses would mean the Democrats would roll back the tax cuts. That would impact tech spending.

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