3 factors that will impact market sentiment today

Here are three key factors that can dent sentiment

Markets are expected to witness a gap-down opening as race to the White House nears finish. Early trends suggest Republican nominee Donald Trump to be leading in the US Presidential race. Back home, Prime Minister Narendra Modi's move to demonetise Rs 500 and Rs 1000 notes will also impact the market sentiment.

At 08:20 am, the SGX Nifty was trading at 8,298 levels, down 211 points or 2.5 per cent.  Here are three factors that will set the market tone in today's trade:

1) Trump leads in White House race: Republican Donald Trump held slight leads in the vital battleground states of Florida, Virginia and Ohio, clinging to a narrow advantage over Democrat Hillary Clinton in key states that could decide their race for the White House. At 08:10 IST, Trump had 137 electoral votes to Clinton’s 104.

2) Rs 500 and Rs 1000 taken out of circulation: From midnight, the Rs 500 and Rs 1000 notes have gone illegal. While the fresh denominations of Rs 500 and Rs 2000 will soon come in circulation, the process will involve major logistics and administrative challenges. The move is expected to hit the real estate and consumption stocks the most. 

3) Rupee's trajectory / FII flows: Foreign investors will closely watch what trajectory rupee will take as uncertainly looms over the circulation of local currency, while Reserve Bank of India and banks deal with liquidity challenges. That apart, they will also recaliberate their fund allocation strategy to emerging markets, including India post the outcome of the US Presidential election.