Why Trump election lead sparked 902-pt rally in Sensex; Nifty near 24,500

Stock Market Today: The BSE Sensex today soared 1,093.1‬ points or 1.37 per cent to hit an intraday high of 80,570. The NSE Nifty50, meanwhile, jumped 324.3 points or 1.33 per cent at 24,538

Stock market today: Stock market bulls flexed muscles on Dalal Street on Wednesday, November 6, as former President Donald Trump claimed victory in US election 2024. US election results' trends showed Trump was leading with 266 electoral votes, while Democratic rival Kamala Harris was leading with 205 votes as of 3:30 PM (local time).

 

Back home, the BSE Sensex today soared 1,093.1‬ points or 1.37 per cent to hit an intraday high of 80,569.73. The NSE Nifty50, meanwhile, jumped 324.3 points or 1.33 per cent at 24,537.6, as analysts expect Trump's victory to be positive for Indian markets. The Sensex idex, eventually, closed 901.5 points (1.13 per cent) higher at 80,378 level, and the Nifty50 shut shop at 24,484, up 271 points or 1.12 per cent.

 

"We can expect more friendly economic policies from the US with Trump anticipated to win," said G Chokkalingam, founder and head of research, Equinomics Research.

 

A Trump win in the November 2024 polls, experts believe, is likely to benefit Indian auto, energy and metal sectors, while being neutral for the pharmaceutical space.

 

Business-wise, the US accounts for around 18 per cent of India's merchandise exports, and the biggest export items include electronics, pearls and precious stones, pharmaceuticals, nuclear reactors, petroleum products, and to a lesser extent, iron and steel, autos and textiles.

 

India is also one of the world's top services exporters, particularly of IT and professional services, to the US.

 

"More than who wins, a clear result will be more of a relief to the markets which have been in a volatile mood predicting the outcome. This could translate positively for India as India's trade relations with the US remains robust," said Anitha Rangan, an economist at Equirus.

 

Rangan added that clarity on the results will put focus back to fundamentals, where India remains on a strong footing. The correction or adjustment led by outflows seen in the last one month, she added, should reverse.

Strength after correction

In October, the Nifty declined around 6.16 per cent and the BSE Sensex slipped  around 5.7 per cent. This drawdown has prompted investors to indulge in bargain buying at lower levels, as per G Chokkalingam.

Strength in Global markets

Wednesday saw a largely firm trade in Asia with Japan's Nikkei up 2.61 per cent, China's mainline was down 0.50 per cent, Shanghai was flat with a negative bias, and Hong Kong's Hang Seng was down 2.23 per cent.   Past suggests Trump's victory could be negative for the Chinese markets due to his anti-China policies.

US index futures

On Tuesday, the Dow Jones closed up 1.02 per cent, S&P 500 finished up 1.23 per cent, and the Nasdaq Composite ended up 1.43 per cent.

 

Similarly, the US futures, too, were trading in the positive territory with Dow Jones futures up over 2 per cent, and S&P 500 Futures and Nasdaq  futures up over 1 per cent each.

 

In Europe, Britain's FTSE was up 1.41 per cent, France's CAC was up 2.01 per cent and German's DAX was up 1.44 per cent

HSBC PMI data

Growth in India's dominant services industry, which picked up last month after dipping to a 10-month low rate in September amid a marked expansion in demand, also boosted sentiment.

 

The HSBC final India Services Purchasing Managers' Index, compiled by S&P Global, rose to 58.5 in October from September's 57.7, exceeding a preliminary estimate of 57.9.