Sensex surges over 1,000 points as Donald Trump claims victory in US elections

US elections: Donald Trump has already declared victory, and his win appears to have fuelled optimism on Dalal Street as Sensex has surged over 1,000 points.

In Short

• Sensex, Nifty gain as Donald Trump claims victory in US elections
• IT stocks lead rally as Trump’s win boosts market sentiment
• Nifty IT index surges 4%, driven by gains in TCS, Infosys

Benchmark stock market indices surged sharply on Wednesday, following early-session volatility driven by uncertainty over the US elections. What began as a close race between Republican Donald Trump and Democrat Kamala Harris has now clearly tilted in favour of the former US president.

Trump has already declared victory, and his win appears to have fuelled optimism on Dalal Street.

By 2:28 pm, the S&P BSE Sensex was up by 1055.31 points, reaching 80,531.94, while the NSE Nifty50 gained 311.95 points, trading at 24,525.25.

Most broader market indices also saw gains as volatility eased with the election outcome becoming clearer.

US ELECTIONS, TRUMP VICTORY AND IT STOCKS

IT stocks led the rally during the session, with the Nifty IT index rising by 4%. TCS, HCLTech, Infosys, Tech Mahindra, and Wipro were among the top performers. The gains were partly due to brokerages previously indicating that a Republican win could temporarily boost US equities, benefiting Indian IT stocks.

“Our equity strategy team believes that a Red Sweep would probably trigger a short-term rally, but its sustenance depends on earnings momentum and valuations, both of which are weak,” Emkay Global said.

Trump’s victory could also positively impact heavyweight US equities, including Elon Musk’s Tesla, potentially driving a stronger rally.

Equirus economist Anitha Rangan said, “Donald Trump’s victory could likely result in more spending in the US, which could translate into inflation remaining somewhat elevated. At the same time, it would also mean a stronger dollar but more trade barriers.”

“However, more than who wins, a clear result will be more of a relief to the markets, which have been in a volatile mood predicting the outcome. This could translate positively for India as India’s trade relations with the US remain robust,” she added.

This sentiment seems to have played a role in the strong rally on Dalal Street.

“On a medium to longer term, positive outcomes should emerge from the constructive relations India has with both USA and Donald Trump. Currency adjustments can well be managed with the reserves India has built,” Rangan said.

She also pointed out a caveat: “The only caveat could be that the US rate-cutting cycle could be slower than anticipated, which could also translate into a shallow rate-cutting cycle for India. However, recall that India’s rate hikes were only half of what the US hiked. So India has sufficient elbow room from the interest rate space as well, with growth remaining resilient,” she explained.