After a volatile trading session, market indices Sensex and Nifty closed 0.80% higher each on Wednesday, tracking gains in IT stocks, ahead of the outcome of the US presidential elections. Extending gains for the third straight session, Sensex ended 355 points higher at 40,616 and Nifty was rising by 95 points by 11,908.
Infosys, followed by Sun Pharma, Tech Mahindra, HCL Tech and TCS were among the top gainers on Sensex today. On the other hand, ICICI Bank, Power Grid, Axis Bank, HDFC, and ITC were among the laggards.
IT stocks led the rally in the Indian market today as results of US presidential elections signalled a tight contest between President Donald Trump and challenger Joe Biden. Barring financials, metal and realty index, all the other sector-based indices closed higher today, with over 2% rise in pharma index, followed by almost 1.8% gain in IT sector.
The market traded in big swings today as investors pulled back on expectations for big swings in U.S. stocks on Tuesday, looking for market uncertainty to recede after Election results.
Global investors were closely watching the outcome of US elections on Tuesday, hoping a win by challenger Joe Biden in the presidential race might lead to a more economic stimulus for the coronavirus-hit economy.
In Europe, cases have also surged, with the Spanish government on Sunday declaring a national state of emergency. Worldwide, there were 478 lakh confirmed cases and 12.20 lakh deaths from COVID-19 outbreak. India's COVID-19 caseload breached the 83-lakh mark and death toll from COVID-19 infections rose to 1.23 lakh, as of today.
Most Asian markets were trading mostly higher except Australia after the country's retail turnover fell 1.1% in September. European markets were also trading on a positive note in early deals.
US markets closed sharply higher as investors monitored rising covid-19 cases and US Presidential election results.
As per latest numbers, Joe Biden has won 238 electoral college votes, while US President Donald Trump follows with 213 votes. The winner should have at least 270 electoral college votes.
Markets on Thursday will react to the outcome of the final results of the US Presidential elections today. Challenger Joe Biden and President Donald Trump are involved in a close electoral fight where economic recovery and handling of the pandemic are key issues among the voters in the world's oldest democracy.
Ajit Mishra, VP - Research, Religare Broking said, "Markets registered strong gains in today's session largely led by positive global cues. The benchmark index opened gap up and gradually inched higher as the day progressed. Finally, the Nifty ended higher by 1.2% at 11,814 levels. However, the broader market indices underperformed as both Midcap and Smallcap stocks ended higher by 0.4% and 0.3% respectively. On the sector front, banking continued to witness strong buying interest for the second consecutive session. Apart from banking, Auto, Metal and Consumer Durables also posted decent gains."
He added, "All eyes are on the US election and participants will be closely eyeing the signals from global indices for cues. We're already witnessing volatile swings across the board and do not expect any relief from that front in the near future. Considering the scenario, traders should prefer defensives and other low beta stocks until we see some stability."
On markets closing --Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments said, "We were unable to cross the 11950 levels. That continues to be the resistance point and if we get past that, we should expect the markets to go to 12200-12300 during the course of the November series. The support for the Nifty is at 11500. Until then, any dip can be used to accumulate long positions.
Vinod Nair, Head of Research at Geojit Financial Services said, "A close contest in the US election spiked volatility in the global market after yesterday's strong rally. However, the Indian market was not so volatile as the outcome is not expected to change the country's strategic outlook. Benchmark indices were supported by IT & Pharma sectoral rally due to the strengthening of USD. The expectation of another set of the domestic stimulus also helped to raise investor's confidence. Political developments in the US along with likely measures to be announced by the Fed from the ongoing meetings will drive the market."
In the forex market, the rupee depreciated 35 paise to close at 74.76 against the US dollar. On Tuesday, Indian Rupee ended at 74.40, up 3 paise.