Sensex, Nifty Rally Nearly 2% as US Election Outcome and Falling Oil Prices Boost Investor Sentiment

Mumbai: Indian equity markets opened sharply higher on Thursday, with benchmark indices Sensex and Nifty gaining nearly 2 per cent amid strong global cues, easing crude oil prices and reduced uncertainty following the US midterm election results.

The BSE Sensex opened at 78,910.94, gaining 1,609.54 points or 2.08 per cent. The NSE Nifty 50 also started the session on a strong note at 24,378.05, up 417.45 points or 1.74 per cent.

Buying was broad-based across sectors, with financial stocks leading the rally. The Nifty Private Bank index surged more than 2 per cent, while the Nifty Realty index advanced 1.86 per cent. All sectoral indices were trading in positive territory during early deals.

Other major gainers included Nifty Cement, Auto, IT, Oil and Gas, and PSU Banks, which climbed up to 1.82 per cent. FMCG, consumer durables, metals, media and chemicals stocks also registered gains ranging between 1 per cent and 1.5 per cent.

Market analysts said the Nifty's ability to remain above its 200-day exponential moving average (EMA), currently around 23,904, indicates that the broader technical outlook remains positive.

The Relative Strength Index (RSI) had climbed to 68.55, signalling strong upward momentum. However, analysts cautioned that some profit booking could emerge in the near term.

From a technical perspective, the 24,000-24,200 range is expected to provide immediate support for the Nifty, while the 24,500-24,700 zone could act as a resistance area.

Global developments also played a significant role in improving investor confidence. US stocks rallied strongly overnight following the midterm election results, with the Dow Jones Industrial Average rising more than 3 per cent, marking its strongest post-midterm election performance in over four decades. The S&P 500 and Nasdaq Composite also gained more than 1.4 per cent each.

The election outcome, which saw Democrats secure both chambers of Congress, helped ease immediate political uncertainty. However, market observers cautioned that concerns over a prolonged political confrontation in Washington could emerge once the initial positive reaction fades, particularly given US President Donald Trump's political approach and the possibility of increased institutional friction.

A sharp correction in international crude oil prices provided another major boost to Indian markets. Brent crude fell nearly 10 per cent, settling below $100 per barrel, easing concerns over India's import bill and inflationary pressures.

US Treasury yields also declined, with the benchmark 10-year yield retreating to around 4.89 per cent. A weaker US dollar and easing geopolitical concerns surrounding Iran further supported demand for riskier assets across global markets.

Meanwhile, foreign institutional investors (FIIs) continued their buying spree in Indian equities for the fourth consecutive session on Wednesday, purchasing shares worth a net Rs 7,284 crore. Domestic institutional investors (DIIs), however, remained net sellers for the fourth straight day, offloading equities worth Rs 3,712 crore.

The combination of strong overseas market performance, lower crude prices and sustained foreign investor inflows provided a favourable backdrop for domestic equities at the opening bell.

Advertisement