You are here: Home » Markets » News
Business Standard

Recovery hopes, US poll optimism propel indices; Sensex jumps 504 points

The Nikkei Manufacturing Purchasing Managers' Index (PMI) rose to 58.9 in October - the highest since May 2010 - igniting hopes of a strong recovery in the economy

Topics
US Presidential elections 2020 | Wall Street | US economy

Sundar Sethuraman  |  Thiruvananthapuram 

Photo: Bloomberg
A clear Biden win, where his party retains control of the House and wins the Senate, seems like the most favourable outcome for the markets, analysts said | Photo: Bloomberg

The benchmark Sensex gained more than 500 points on Tuesday led by strong gains in banking stocks amid optimism of an economic rebound. A rally in global financial as the US presidential race entered the final lap added to the positive sentiment.

The Sensex closed at 40,261, up 504 points, or 1.3 per cent. The Nifty rose 144 points, or 1.2 per cent, to end at 11,813. The Bank Nifty gained 3.2 per cent, adding to Monday’s 4.1 per cent jump. Dow Jones, the US index, was also up over 500 points to reach 27,431.08 at 9:33 pm IST.

The Nikkei Manufacturing Purchasing Managers’ Index (PMI) rose to 58.9 in October — the highest since May 2010 — igniting hopes of a strong recovery in the economy. Market players said banking stocks also rallied on hopes of a favourable verdict by the Supreme Court in the loan moratorium case later this week.

Most global remained upbeat as investors bet on a clear win for A clear Biden win, where his party retains control of the House and wins the Senate, seems like the most favourable outcome for the markets, analysts said. Many polls suggested the likelihood of a Democratic sweep in the election. However, the race remains tight in some battleground states, some of which are seeing virus cases soar.

chart

The factory output data of China, Europe, and the US was also cheered by investors. The US manufacturing activity rose in October, and new orders jumped to the highest in nearly 17 years. The Chinese factory activity expanded the fastest in a decade, and the Eurozone manufacturing also rose.

Market players said investors would shift their focus to the US monetary policy once clarity emerges regarding the election result. The Federal Reserve’s two-day meeting on interest rate policy will begin on Wednesday. Investors hope that it will keep interest rates unchanged. The meeting happens as the US is grappling with rising unemployment amid a rise in Covid-19 cases.

“The market was on a strong footing as US manufacturing data surpassed expectations, and a rebound was seen in Europe and China. The market is also sustaining confidence ahead of the Fed meeting, as it is not expecting rate increase,” said Vinod Nair, head of research, Geojit Financial Services.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, November 03 2020. 22:07 IST
RECOMMENDED FOR YOU
.