As the US election results begin to roll in with Joe Biden close to victory, Indian indices in early trade on November 5 rallied sharply by more than 650 points with the Sensex clinching 41000 levels, up over 550 points or 1.36%, and Nifty hitting 12100 points at the day's high level.
Here are some of the probable reasons pushing Indian indices higher by over 1 percent in trade today:
1. Gains in banking, IT stocks:
After SBI's stellar show in Q2FY21 with net profits jumping as much as 52% YoY, several brokerages upgraded the counter, which led the stock of SBI to gain close to 7%. Other banking heavyweights which contributed to Sensex's upward move today include HDFC Bank, Kotak Mahindra, Axis Bank among others.
Also, as the US election results are being awaited, IT stocks have gained for the second straight day as the dollar has firmed up against major currencies. Infosys, HCL and TCS have been up in the range of 1.21-2.55%.
2. GST collection and Services activity increased for the October month:
GST collection for the October month crossed Rs. 1trillion mark for the first time since February this year, indicating green shoots in the economy. Also, October services sector activity known by a private survey showed improvement for the first time in eight months as demand saw recovery. The Nikkei Services Purchasing Managers' index (PMI) came in well above the 50 mark at 54.1 separating growth from contraction.
3. Global cues:
In a tight race to the US Presidency, Joe Biden has already won 264 electoral votes and is very close to occupying the White House as per the news reports. In the overnight session, the US Nasdaq gained 3.85% while S&P and Dow index gained 2.2% and 1.34%, respectively.
And tracking strong US markets gains, Asian stocks too gathered momentum with Japan's Nikkei up 1.73%, Hong Kong Hang Seng up 2.86% and Straits Times higher by 2.3 percent.
US stock futures are up too as investors await clear results from the US elections. As per experts, market has been gaining as the potential delay in election results is already priced in and on hopes for a Democratic White House paired with a Republican Senate as that combination would lead to more modest policy.