Indian stock markets saw a significant rally following the US election results, which marked a victory for Republican candidate Donald Trump in the 2024 presidential race. The Indian equity markets were buoyed by the reduction in political uncertainty, with investors reacting positively to Trump’s strong mandate. The benchmark BSE Sensex surged by 901.50 points, or 1.13%, closing at 80,378.13, while the Nifty gained 270.75 points, or 1.12%, closing at 24,484.05.
Among the major Sensex stocks, TCS, Infosys, and Tech Mahindra led the gains, climbing 4.21%, 4.02%, and 3.85%, respectively. These IT sector heavyweights were some of the biggest beneficiaries of the rally, thanks to renewed optimism for global growth and tech spending.
Conversely, a few stocks underperformed, with Titan, IndusInd Bank, and Hindustan Unilever seeing losses. Titan fell by 1.72%, while IndusInd Bank and HUL dipped by 1.14% and 0.79%, respectively. Other major banks such as Axis Bank and HDFC Bank also saw marginal declines, suggesting a cautious mood among investors in the banking sector.
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The broader market sentiment was driven by expectations of tax cuts and increased government spending in the US. The market’s “risk-on” attitude boosted Nifty IT, Realty, and Oil & Gas indices, which rose 3.99%, 2.58%, and 2.54%, respectively. The Indian stock market mirrored positive sentiment from global markets, as US and European indices closed higher.
In Asia, while Tokyo saw gains, markets in Seoul, Shanghai, and Hong Kong ended lower, reflecting mixed global performance. Despite this, India’s strong market performance stood out, driven by expectations that Trump’s economic policies could support growth and reduce uncertainty.
The Indian rupee, however, saw some weakness against the dollar. It depreciated by 21 paise to reach ₹84.30, an all-time low against the US Dollar, following a rise in the US Dollar Index. The rupee opened at ₹84.23 and oscillated between ₹84.15 and ₹84.31 during the day. Analysts pointed out that the rupee’s depreciation was in line with global trends, as the dollar strengthened on the back of Trump’s victory and expectations of continued economic stimulus.
In terms of institutional activity, Foreign Institutional Investors (FIIs) were net sellers, offloading shares worth ₹2,569.41 crore, while Domestic Institutional Investors (DIIs) took the opposite stance, buying ₹3,030.96 crore worth of shares. This indicates that while global investors may have shown caution, domestic investors were more confident, buying up shares in the rally.
The positive performance of the Indian stock market can be attributed to the anticipation of reduced global uncertainty and the expectation that Trump’s policies will benefit global growth. The rally is a reflection of increased confidence among investors, particularly in sectors such as technology and real estate, which stand to gain from Trump’s business-friendly agenda.
While the rupee’s depreciation remains a concern, the overall market sentiment in India appears to be favorable in the short-term, bolstered by optimism around US policies and the Indian market’s resilience.
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