US stock markets surged on Wednesday following the midterm elections, raising expectations of a strong opening for Indian equities on Thursday. However, semiconductor stocks remained under pressure, while Asian markets traded mostly lower in early dealings.
Concerns that the Democrats could oppose further data centre expansion weighed on chipmakers. Meanwhile, Brent crude slipped below $94 a barrel in early trade, easing inflation and interest rate concerns. The dollar weakened and gold prices surged.
In derivatives trading at GIFT City, GIFT Nifty closed at 24,385.00 on Wednesday night. It fell to 24,289 in early Thursday trade before recovering to 24,333, indicating a positive opening for the Indian market.
The US election outcome is expected to strengthen opposition to the Trump administration's policies. Two developments following the results encouraged investors. Trump acknowledged that the Iran war had contributed significantly to the Republican defeat and indicated his willingness to work with the Democrats.
The remarks were interpreted as signs of a possible moderation in his approach. Financial markets reacted positively, with major indices recording stronger-than-expected gains. Crude oil prices plunged nearly 9% on hopes that the administration might make serious efforts to end the Iran war. Oil has declined by nearly 20% over the past week.
Gold gained more than 4% as expectations of easing inflationary pressures and lower interest rate risks supported demand.
The dollar index declined following the election results, although there was no extraordinary collapse. US Treasury bond prices rose, pushing yields lower.
The source market data indicated an 82.7% probability of a Federal Reserve rate increase in December, while expectations of further increases at the following two meetings moderated. This particular probability figure could not be independently confirmed.
Investors appeared to be factoring in the possibility that a change in the war situation could ease inflation.
US equities recorded substantial gains on Wednesday. The Dow Jones Industrial Average, which initially dropped around 450 points as election results emerged, eventually closed more than 1,500 points higher.
It was the index's strongest single-day percentage advance in about 19 months.
The Nasdaq Composite, which initially declined around 650 points, recovered to close 1.44% higher.
However, concerns about the Democrats' position on data centre expansion and its implications for artificial intelligence development limited gains in some technology stocks.
Qualcomm's results, released after market hours, disappointed investors, sending the stock down around 7% in extended trading.
Investors expect that restrictions on data centre construction could slow infrastructure expansion by major hyperscalers. This could reduce borrowing and capital expenditure, potentially lowering demand for memory chips and putting pressure on their prices.
Apple, Microsoft and Amazon rallied strongly on expectations that lower infrastructure spending could benefit large technology companies.
In contrast, semiconductor and GPU manufacturers Nvidia, Micron and Intel declined. Data centre companies CoreWeave, Nebius and IREN also came under pressure.
Datadog, Seagate and Sandisk recorded losses. Marvell and Lumentum, which recently announced a merger, declined more than 7%. Moderna, McDonald's, Home Depot and 3M were among the gainers.
South Korean semiconductor giants SK Hynix and Samsung also faced heavy selling pressure.
Wednesday's closing figures were:
Dow Jones: 53,356.12, up 1,569.40 points (3.03%)
S&P 500: 7,688.62, up 119.70 points (1.58%)
Nasdaq Composite: 25,736.51, up 364.50 points (1.44%)
The US index closing figures are consistent with the Associated Press market report.
US stock futures presented a mixed picture on Thursday morning. Dow Jones futures advanced 148 points, or 0.28%, while S&P 500 futures declined 10 points, or 0.12%. Nasdaq futures fell 215 points, or 0.75%, reflecting continued pressure on technology stocks.
Indian American Depositary Receipts (ADRs) traded unevenly in New York on Wednesday.
HDFC Bank gained 5.55% during regular trading. It subsequently advanced 0.21% in extended trading to $24.38.
ICICI Bank rose 3.75% during regular trading and remained unchanged at $31.26 in the subsequent session.
Infosys advanced 2.60% in regular trading before declining 1.39% in extended trading to $12.07.
Wipro gained 0.47% during the regular session and rose another 0.46% in extended trading to $2.17.
European stock markets rallied on Wednesday, supported by the political setback suffered by Trump and the sharp decline in crude oil prices.
Investors welcomed the prospect of reduced geopolitical tensions and easing energy costs.
Asian equities remained weak on Thursday morning, with semiconductor companies facing particularly heavy selling pressure.
South Korea's Kospi declined 4.6%. SK Hynix fell 9%, while Samsung Electronics lost 8%.
Japan's Nikkei dropped 1.4%. SoftBank Group, which has substantial investments in semiconductor-related businesses, declined 5.5%.
Australia's benchmark index fell 0.60%, while Taiwan's market lost 1.85%.
The Shanghai Composite declined 0.50%. In contrast, Hong Kong's Hang Seng advanced 2.35%.
Indian equities advanced for the fifth consecutive session on Wednesday, supported by increased foreign institutional buying, Trump's political setback and declining crude oil prices.
Foreign investors deployed more funds in Indian equities than in previous sessions. Foreign portfolio investors are also anticipating a substantial reduction or possible abolition of the long-term capital gains tax on equity investments.
Most sectors advanced, except information technology and capital markets. The media index surged 5.15%, supported by strong gains in Saregama and Zee Entertainment.
Defence, realty, metals, consumer durables, oil, automobiles and FMCG shares also recorded significant gains. Public sector fertiliser company FACT advanced 6.01%. Other fertiliser stocks gained up to 3%.
Gold financing companies rallied as bullion prices strengthened. Muthoot Finance gained 7.18%, IIFL Finance rose 7.48%, and Manappuram Finance advanced 3.13%.
Among Kerala-based banks, South Indian Bank, CSB Bank and Dhanlaxmi Bank gained around 3%, while Federal Bank advanced 0.43%.
The broader market remained strongly positive. On the BSE, 3,047 shares advanced against 1,349 declines. On the NSE, 2,713 stocks gained while 875 ended lower.
Foreign institutional investors made net purchases worth ₹7,284.03 crore in the cash market on Wednesday.
Domestic institutional investors recorded net sales of ₹3,712.23 crore.
The Sensex gained 383.55 points, or 0.50%, to close at 77,301.40. The Nifty 50 rose 149.75 points, or 0.63%, to finish at 23,960.60. Bank Nifty advanced 373.55 points, or 0.67%, to close at 55,913.60.
The Nifty Midcap 100 surged 909.25 points, or 1.55%, to 59,505.50, while the Nifty Smallcap 100 gained 373.55 points, or 2%, to finish at 19,026.40.
The benchmark closes and broader-market percentage changes were independently corroborated.
The US election outcome triggered another rally in gold prices. After gaining more than 3% on Wednesday, gold rose further on Thursday morning, crossing $4,100 an ounce.
On Wednesday, gold closed at $4,061.20 an ounce, gaining $129.80, or 3.30%. It advanced another 1.75% in early Thursday trading to reach $4,136.
In Kerala, 22-carat gold prices increased twice on Wednesday, registering a total gain of ₹2,320 per sovereign to reach ₹1,04,720. The afternoon rate was confirmed by Kerala gold price records.
Silver gained 5% on Wednesday to close at $52.35 an ounce. It advanced to $52.80 in early Thursday trading.
Other precious metals were quoted at:
Platinum: $1,522
Palladium: $1,002
Rhodium: $8,650
International rubber prices declined further, while prices in Kerala remained at a record ₹300 per kg. In Bangkok, RSS-1 rubber fell to $280.35 per quintal, while RSS-3 declined to $276.90. In Kerala, RSS-4 rubber remained at ₹30,000 per quintal.
Major industrial metals recorded gains on Wednesday. Copper rose 0.63% to $14,199.85 per tonne, while aluminium advanced 1.06% to $3,073.85. Nickel, zinc and tin also moved higher, while lead declined.
Cocoa prices increased to $5,427 per tonne. The market expects African cocoa production to decline by 10% during the 2026-27 season.
Arabica coffee prices declined 1.57% to $2.795 per pound. The depreciation of the Brazilian currency weighed on coffee prices. Palm oil fell 1.21% to 4,496 Malaysian ringgit per tonne.
The US dollar index weakened on Wednesday, closing at 101.57. It declined further to 101.29 in early Thursday trading. The euro strengthened to $1.125, while the British pound rose to $1.3484.
The Japanese yen advanced to 158.07 against the dollar. The Chinese yuan remained around 6.67 per dollar.
The yield on the US 10-year Treasury note declined to 4.855% on Thursday morning.
The Indian rupee extended its gains on Wednesday. The dollar declined by 10 paise to close at ₹94.64. The rupee is expected to strengthen further on Thursday. In the offshore forward market, the dollar declined to ₹94.24 in early trade.
The Chinese yuan weakened to ₹14.17, while the euro slipped to ₹106.38.
Crude oil prices plunged nearly 9% following the US midterm election results. Brent crude declined $8.98 on Wednesday to close at $94.62 a barrel. It fell further to $93.88 in early Thursday trading.
West Texas Intermediate (WTI) crude was quoted at $87.35 a barrel.
Cryptocurrency prices moved higher. Bitcoin crossed $80,450, while Ethereum traded above $2,420.
Solana advanced beyond $95.50.
(Wednesday, November 4)
Sensex: 77,301.40 (+0.50%)
Nifty 50: 23,960.60 (+0.63%)
Bank Nifty: 55,913.60 (+0.67%)
Nifty Midcap 100: 59,505.50 (+1.55%)
Nifty Smallcap 100: 19,026.40 (+2.00%)
Dow Jones: 53,356.12 (+3.03%)
S&P 500: 7,688.62 (+1.58%)
Nasdaq Composite: 25,736.51 (+1.44%)
US dollar: ₹94.64 (−₹0.10)
Gold (ounce): $4,061.20 (+$129.80)
Gold (sovereign): ₹1,04,720 (+₹2,320)
Brent crude: $94.62 (−$8.98)