Indian stock markets have given a roaring approval to US president-elect Joe Biden.
Today (Nov. 9), in the first trading session since the US election results were announced, Indian benchmark indices—Sensex and Nifty—have rallied to record highs. The rally is mostly supported by the belief that Biden’s victory “will instil confidence amongst investors by reducing ‘policy uncertainty’ considerably,” said Sparsh Chhabram, an economist at Mumbai-based Centrum Broking.
The biggest gainers in early trade today are financial stocks like ICICI Bank and Axis Bank as well as information technology (IT) shares like Infosys and Tech Mahindra. Biden’s win is seen as a big positive for Indian IT companies, which get nearly 70% of their revenue from the North American region and had been at the receiving end of Donald Trump’s protectionist measures.
That’s probably the reason that the Indian stock market had started celebrating even before the results were officially in.
Bombay Stock Exchange’s Sensex—which constitutes top 30 companies—has been rising over the last week as Biden slowly inched towards presidency.
National Stock Exchange’s Nifty—a collection India’s 50 largest companies—has also been on an upward trajectory over the last week.
Experts had predicted that emerging markets like India would be clear winners of the US elections. Low interest and favourable trade policies, which are expected to continue under Biden’s regime, will be beneficial for Indian markets and companies.
“I expect emerging market Asia equities to strengthen from current levels into the year-end as the election overhang is removed and investors refocus on fundamentals, such as an improving economy and likely Covid-19 vaccine in 2021,” David Chao, a strategist at asset management company Invesco, had written in a note before the US elections.