The Indian equity market witnessed a strong rally on Wednesday, with Sensex and Nifty rising over 1% in intraday trade, led by IT stocks after early results showed a lead for the Republican candidate Donald Trump in the U.S. presidential election. However, in the forex market, rupee declined as much as 26 paise to hit an all-time low of 84.36 against the U.S. dollar as the dollar index climbed nearly 1.5% to a four-month high of 104.9, tracking early trends from the U.S. election results.
Extending gains for the second straight session, the BSE Sensex gained as much as 916 points, or 1.15%, to 80,393 during the session so far. In a similar trend, the NSE Nifty surged 274 points, or 1.13%, to touch a high of 24,487 during the trade so far.
The top gainers on the BSE Sensex pack were IT heavyweights Tata Consultancy Services (TCS), HCL Tech, Infosys, and Tech Mahindra, followed by Adani Ports, Bharti Airtel, Sun Pharma, and M&M.
On the other hand, IndusInd Bank, Titan, HUL, Axis Bank and HDFC Bank were among top laggards.
On the sectoral front, IT, Realty, OMC, and Healthcare indices were among the best performers, while Metal and Consumer Durables indices declined the most.
Early today, the domestic bourses opened higher, tracking firm cues from global peers, but the equity market gained momentum after early trends from the U.S. election results showed that Donald Trump is likely to return to White House for the second time after defeating opponent Kamal Harris.
The IT sector saw strong buying amid hopes that Trump’s coming back to power is positive for the sector as his government’s policies are expected to strengthen the dollar.
"Strong quarterly results from IT companies or optimistic profit expectations could stimulate purchasing interest. Another reason is that foreign portfolio investors (FPIs) may be reviving their interest in Indian IT stocks, which would raise buying pressure," adds Gour.
On broader markets, Gour said Nifty saw a strong recovery from the 23,800 level, with 24,650 as an immediate hurdle. “Above 24650, the 25000-25200 zone is a critical resistance area. Immediate support is at 24040, with further support at 23800.”
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