Along with their narrow majority in the House of Representatives, a ‘blue sweep’ of Congress could usher in larger fiscal stimulus and pave the way for President-elect Joe Biden to push through greater corporate regulation and higher taxes.
“Banks, which underperformed the Nifty in 2020, are staging a comeback. Data regarding deposit growth and loan growth for Q3 for HDFC Bank is very positive. This trend is likely to be repeated for other top private sector banks too. The high volume of delivery based buying in these stocks is an important indicator,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“While macroeconomic news continues to be positive, the rising crude is a dampener. Higher crude means higher cost-push inflation, which, in turn, might force the RBI to depart from the accommodative policy stance.”
Factors driving markets
-Georgia elections: Polls closed in Georgia after voters cast ballots in a pair of runoff elections that will determine both control of the U.S. Senate and Democratic President-elect Joe Biden’s ability to push through an ambitious legislative agenda. Democrat candidates jumped to early leads in preliminary voting returns, data compiled by Edison Research showed.
-US-China tensions: US President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay, the White House said, escalating tensions with Beijing before President-elect Joe Biden takes office this month.
How are bluechips doing
After opening in the green, benchmark indices dipped but recovered soon after. At 9.58 am, BSE flagship Sensex was up 56 points or 0.11 per cent to 48,493. NSE benchmark Nifty followed and added 16 points or 0.11 per cent to 14,216.
“14,200-14,250 can pose as a resistance patch for the Nifty. If we can keep above 14,250, we could travel to 14,350. Since we are in an unchartered territory, traders should trade cautiously and update their stops on a continuous basis. 13,950-14,000 is a good support,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.
In the 50-share pack Nifty, GAIL was the biggest gainer, up 3.40 per cent. ONGC, SBI, Titan, Indian Oil, Bharti Airtel, ICICI Bank and Britannia were among other gainers.
ITC was the top loser in the pack, down 1.4 per cent. HUL, Reliance Industries, Eicher Motors, Ultratech Cement, Axis Bank, Bajaj Finance and HDFC Life Insurance were other losers in the pack.
Broader market indices traded with gains outperforming their headline peers in morning trade. Nifty Smallcap added 0.75 per cent while Nifty Midcap advanced 0.64 per cent. Broadest index on NSE, Nifty 500 was up 0.14 per cent.
Trident, Amber Enterprises, BASF, Fortis Healthcare, Navin Fluorine and Bank of India were among major gainers from the space while Aarti Industries, Future Retail, Crompton Greaves, Lemon Tree Hotels, Sterlite Tech and Rain Industries were under selling pressure.
Futures for the S&P 500 fell 0.43 per cent, while Nasdaq futures shed 0.7 per cent on fears Democrats could pursue tighter regulations on big tech firms.
Other industries, such as banks, oil and gas and healthcare, could come under heavier scrutiny, while infrastructure and alternative energy sectors could benefit.
Japan’s Nikkei fell 0.4 per cent while MSCI’s index of Asian-Pacific excluding Japan erased earlier gains to stand almost flat.