BackDow surges 600 points on US election day. How Sensex, Nifty are positioned
The outcome of US Presidential elections will impact the sentiments and near term trend of the markets, say analysts
PremiumWall Street stocks were firm in early trade as voters headed to the polls in the US. Dow was up nearly 600 points while the broad-based S&P 500 gained 1.8%. Political commentators have warned that the outcome of the race between President Donald Trump and former Vice President Joe Biden may not be clear tonight or even on Wednesday, depending on trends across key swing states and the speed with which votes, absentee ballots and mail-in ballots can be counted.
"If the US election outcome is too close, either side could challenge the vote and while there are various ways to resolve the issue, a final decision may take days to come. There is also uncertainty whether President Trump will accept election result or not which could also delay a final result. Either scenario is not considered good for US economy as well as general market risk sentiment," Kotak Securities said in a note.
Back in India, domestic shares ended higher today as banks and financial stocks extended gains for a second straight session. The NSE Nifty 50 index closed up 1.24% at 11,813.5 and the S&P BSE Sensex ended 1.24% higher at 40,261.13.
The Nifty Banking Index added 3.17%, led by a 6.6% gain in ICICI Bank Ltd, which rallied for a second session following upbeat earnings on Saturday.
The Financials Index gained 3.14%, with heavyweight HDFC Ltd rising 3.95% on the back of strong earnings from Monday.
India's biggest lender State Bank of India closed 4.2% higher ahead of its earnings report scheduled on Wednesday.
"All eyes are on the US election and participants will be closely eyeing the signals from global indices for cues. We’re already witnessing volatile swings across the board and do not expect any relief from that front in the near future," said Ajit Mishra, VP - Research, Religare Broking Ltd.
Sneha Seth, derivatives analyst, Angel Broking, says: "The maximum open interest concentration for the current weekly series is placed at 12000 call and 11500 put options. The Volatility index plunged 4%, which is a sign of strength. Considering the recent development in derivatives segment, we continue with our optimistic stance on market and soon expect extension of recent rally beyond 12000 mark. Hence, any intraday decline shall be an opportunity to re-enter."
Here is what other analysts say:
Deepak Jasani, Head of Retail Research, HDFC Securities
"Nifty rose with a mildly positive advance decline ratio, bringing back confidence of traders in the near term direction. However the outcome of US Presidential elections which will be known earliest by Nov 04 late night IST will also impact the sentiments and near term trend of the markets. On upmoves 11837-11899 could offer resistance while on downmoves 11723-11749 could offer support to the Nifty.
Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments
"It is not advisable to initiate or keep short positions in the market. The longs would trigger if we can keep above the 11800-11850 levels for a couple of days and that should take the index to 12200-12300 levels during the course of this month. Until this happens, traders are advised to maintain a cautious stance and wait for the right time to enter into directional trades."
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
"The short term trend of Nifty has turned up, after forming a reversal type pattern at 11550 levels. One may expect further upside in the coming session and Nifty could test the next upside resistance of 11900-11950 in the next couple of sessions. Immediate support is placed at 11740 levels."
Ruchit Jain, Senior Analyst - Technical and Derivatives, Angel Broking
"Nifty has reclaimed the 11800 mark ahead of the mega global event and hence, all eyes would now be on the U.S. elections outcome and the global markets reaction on it. Technically, it seems that we are posed for the next leg of upmove after the recent pause. A support base has been formed in Nifty now in the range of 11550-11600 and till this intact, the near term trend looks firm. Also, the Nifty Midcap index is trading at a crucial juncture as it is near the higher end of the recent consolidation phase. A breakout above 17300-17400 in the Midcap100 index would unfold the next leg of directional upmove and hence, traders should be vigilant on the same. As far as Nifty levels are concerned, the immediate supports for Nifty for the coming session are placed around 11745 and 11670 whereas resistances are seen around 11930 and 11970."
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
“Indian market rose after a massive surge in the US stock futures and unusual strength in European and Asian markets. Nifty 50 index climbed 1.24 per cent to close at 11813. The Bank Nifty surged by 3.17 per cent for the second consecutive day to end the day at 25682. The Nifty has broken the trading range of the last three days at 11750 and hit the resistance of 20 days SMA, which is at 11825. On Wednesday, we could see Indian market being volatile, ahead of the exit poll on prediction after the completion of voting in the US that would drive the sentiment of the market. Buying is advisable if Nifty comes back to 11750/11700 levels with a final stop loss at 11650. On the higher side, 11900/11950 would be the resistance zone, where one need to book profits on long positions."
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