Echoes of the US mid-term election outcome were felt across the global market including India which extended its winning streak to a fifth consecutive session on Wednesday, supported by a sustained decline in crude oil prices, renewed foreign fund inflows and strong Q2 earnings. While the local equity market experienced heightened volatility, investors largely welcomed the outcome as benchmark indices settled the session with noticeable gains.
The NSE Nifty50 gained 0.63% to close at 23,960, while the BSE Sensex advanced 0.50% to 77,301 on Wednesday. The surge came following a nearly 5% gain over the previous four sessions. The broader market also maintained its positive momentum, with the Nifty Midcap 100 and Nifty Smallcap 100 both gaining 0.63% on Wednesday.
“The U.S. midterm outcome improved global sentiment, raising expectations of a more measured approach to trade and tariff policies and potentially supporting FII flows into emerging markets. Domestically, optimism around possible tax relief maybe in the upcoming Union Budget, better-than-expected quarterly earnings and resilient festive consumption added momentum to the rally,” said Vinod Nair, Head of Research, Geojit Investments Limited.
The Democratic Party win the Senate and the House in US midterm elections, taking control of Congress for the rest of Donald Trump's presidency. The defeat of the Republican Party comes amid the Trump administration’s direct involvement in the West Asia crisis which has raised energy prices globally, including in the US.
Gold and Silver prices, meanwhile, rose sharply. Gold prices surged 3% to $4,047 per ounce on Wednesday, as a post-election slide in the dollar lifted demand for bullion after the election outcome. Spot silver climbed nearly 4% to $51.67 per ounce.
The rupee traded positively, gaining around 0.16% to 94.78, as expectations of a possible tax cut lifted sentiment in the secondary market, while FIIs turned net buyers over the last few sessions, said Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities. He added that the domestic currency also drew support from weakness in the US dollar, improving near-term sentiment.
Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services said that the Indian markets are likely to remain supported by improving domestic economic indicators and easing crude oil prices, although volatility may persist amid global uncertainties. Brent crude traded slightly lower at around $102/bbl.
“Post the US midterm elections, investor focus will shift to the US administration’s next course of action on West Asia, as any further escalation or diplomatic progress could significantly influence crude oil prices and global market sentiment in the near term,” added Khemka.
While most sectors advanced on Wednesday, Nifty IT declined 1.5%, tracking a broader sell-off in Asian technology stocks amid concerns over rising artificial intelligence spending and potential regulatory scrutiny following the US election outcome.
