Indian stock indices have ended at an over eight month high after the US Presidential election outcome became clearer with Democrat Joe Biden taking a significant lead over incumbent Donald Trump. India’s biggest lender State Bank of India’s strong September quarter earnings lifted banking stocks. With Thursday’s gain, the Sensex has turned positive for the year 2020.
Sensex jumped 724 points, or 1.8%, at 41,340.16 while the Nifty reclaimed the 12,000 mark and ended up 211.8 points, or 1.78%, at 12,120.30.
State Bank of India gained the most among Sensex constituents, ending up 5.6% followed by Tata Steel, IndusInd Bank, Bajaj Finance and Bajaj Finserv which gained 4-5%. Some said that the market is relieved that the election headed in favour of one candidate compared to Wednesday when it looked like Trump and Biden are going to be locked in a very closely contested battle. Others said a Biden win would ensure a larger stimulus and the markets are cheering that.
Some believe that global markets are rejoicing that the Republicans look set to remain in control of the US Senate, making it difficult for Biden to make big tax changes.
The Nifty is 2.5% away from its record high of 12,430.50, and the Sensex is 2.2% away from all-time high of 42,273.87. After hitting all-time highs in January, stock indices plunged to their lowest level in a year in March as the Covid outbreak turned into a pandemic. However, the reopening of the economy and easy monetary policies from global central banks led to Indian markets scripting one of their fastest recoveries in history.