Midday Market: Nifty and Sensex rally as investors anticipate Donald Trump win in US election

Indian benchmark indices Nifty 50 and Sensex held steady in positive territory, bolstered by hopes of a Donald Trump win in the US Presidential election. At 11:45 am, Sensex rose by 587.64 points, or 0.74 per cent, to reach 80,064.27, while Nifty climbed by 176.10 points, or 0.73 per cent, to 24,389.40. Market breadth was positive with 2,466 advancing shares, 845 declining, and 94 unchanged.

Broader Market & Sector Performance

The broader NSE Midcap 100 rose by 1.5 per cent, with the NSE Smallcap 100 index also up by 1.2 per cent. All sectoral indices traded higher, led by IT stocks, as the Nifty IT index surged over 3 per cent. The Nifty Realty index was up 2.3 per cent, while consumer durables, oil & gas, and PSU banks gained around 1 per cent each.

Market Sentiment on Election Outcome

As the election unfolds, investors are hopeful that a Trump win might drive fiscal spending, inflation, and a strong dollar. “Trump’s win could mean higher spending, potentially elevating inflation and leading to a stronger dollar but with increased trade barriers,” said Anitha Rangan, Economist at Equirus. She noted that a clear election outcome, regardless of the winner, would likely bring stability and could benefit India, given robust Indo-US trade relations.

V K Vijayakumar of Geojit Financial Services highlighted that the market rebound is supported by large-cap banking stocks, indicating potential continuation. However, poor earnings growth for Q2 FY24 might limit a broader rally. Investors are advised to shift from expensive mid and small-cap stocks to stable large-caps.

Key Nifty and Sensex gainers included HCL Tech, TCS, and Infosys, while Titan, IndusInd Bank, and HDFC Life were among the laggards. Titan's Q2 profit drop of 25 per cent led brokerages to reduce price targets, pressuring the stock, while Hindustan Zinc shares fell over 8 per cent on news of a government stake sale.

Technical experts suggest that Nifty’s support at 23,850-23,800 is crucial to avoid further selling pressure. A resistance zone between 24,400 and 24,500 may determine if a sustainable trend reversal is feasible.