(Bloomberg) -- India's benchmark equity index climbed to an all-time high after Democrat Joe Biden was declared the winner in the U.S. election, ending uncertainty of a prolonged process in deciding a victor.
The benchmark S&P BSE Sensex index rose 1.7% to 42,597.43 in Mumbai Monday, finishing higher than the previous record in January. The NSE Nifty 50 index also closed at a fresh high with a similar advance. Both gauges on Friday capped their best week since June.
India's equity gains, which track a surge in stocks across Asia Pacific, come amid signs of a domestic economic recovery after one of the world's strictest lockdowns and the worst quarterly contraction among major economies. A measure of volatility fell for four straight days through Friday after touching a three-month high on Nov. 3.
”Markets have taken the outcome of US elections quite positively. A split Congress in the US will result in Consensus based policies on stimulus & taxation,” said Rusmik Oza, a vice president at Kotak Securities Ltd. “There could be potential relaxation in some of the protectionist measures taken by the Trump government.”
Biden passed the threshold of 270 Electoral College votes needed to capture the presidency and media networks at the weekend declared him victorious. President Donald Trump is weighing legal challenges and has so far refused to concede.
Indian equities could continue to rally “on account of more clarity on U.S. election results,” said Abhimanyu Sofat, head of research at IIFL Securities Ltd.
Locally, investors will now turn their focus to voting in the eastern state of Bihar, where exit polls show Prime Minister Narendra Modi's party falling short of a majority.
“Due to the duration of the regime, even a negative verdict may not be taken as a big setback” to Modi's government, Sofat said.
Votes will be counted on Tuesday in the first test of Modi's popularity since the pandemic swept the nation of 1.3 billion, which now has the world's second-largest infection tally with 8.51 million coronavirus cases.
As earnings continue, 27 of the 39 Nifty 50-member companies that have announced results so far have beaten or matched estimates.
The rupee strengthened 0.1% per U.S. dollar, while the yield on the 10-year government bond increased by one basis point.
The Numbers
- All but one of 19 sector indexes compiled by BSE Ltd. rose, led by a gauge of telecom companies
- ICICI Bank Ltd. contributed the most to the Sensex advance, increasing 4.4%, while IndusInd Bank Ltd. had the largest gain, rising 5%.
Market-related stories
- Virus-Ravaged India Bets on Poor Farmers to Rescue Economy (1)
- Asia Credit Surges in Longest Rally in a Month After Biden Win
- Money Flowed Out of India Equity Funds as Index Sniffed New High
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