Markets extend gains on Obama re-election

Banking shares buoy index

Markets have extended gains following the US election results, as global bourses surged. The BSE Sensex has jumped 130 points to 18,948. Nifty is up 44 points at 5,769.

Barack Obama won a second term as the President of the United States after defeating Republican challenger Mitt Romney in a closely fought battle. Overcoming what appeared to be a cliff-hanger, Obama finally managed to emerge winner after a convincing victory in the crucial state of California.

According to  Sonal Varma, India economist at Nomura, “We expect some moderation in US growth next year. For India, the outcome is broadly status quo as regards the key policies. As regards bond yields, our house view is that we are bullish on bonds and expect the 10-year bond yields rally to 7.80 levels by March 2013, mainly because of domestic factors like open market operations continuing.”

Meanwhile, the rupee advanced further by 24 paise to 54.19 against the US currency on selling of dollars by banks and exporters after the greenback weakened against against major world currencies.

Asian markets are also in the green. The Hang Seng is up 0.3% at 22,010. Taiwan Weighted, Kospi and Straits Times have moved up around half a per cent each.

Banking shares have moved up smartly in trades today. SBI is the top gainer in the Sensex pack - up 2.3% at Rs 2223. HDFC and ICICI Bank have contributed 50 points to the Sensex's upmove.

BHEL, Tata Motors, Jindal Steel, Sterlite and Tata Steel are among the other gainers. However, Tata Power has slipped 1.5% at Rs 105. Bharti Airtel, HUL, Reliance and ITC are also in the red.

BSE market breadth is positive. Out of 2,730 stocks traded, 1,616 shares have advaned while 990 shares have declined.