Biden win spurs indices to record high
Sensex rises 1.7%, hopes of stimulus, easing of visa curbs drive bank, tech stocks; ‘rally unsustainable’
- India’s benchmark stock indices closed at their lifetime highs, as investors bet on the possibility of a U.S. stimulus and President-elect Joe Biden revoking curbs on H-1B visas when he assumes power.
- Indian technology firms will benefit if they are able to send more workers to client sites in the U.S. on these visas.
- The BSE Sensex surged 704 points or 1.68% to 42,597.43, its historical high.
- Top gainers included IndusInd Bank, Bharti Airtel, ICICI Bank, Axis Bank and Power Grid. The BSE IT Index climbed 1.5% while the Bankex rose 2.8%.
- The NSE Nifty 50 also surged 1.6%, or 197.5 points, to a lifetime high of 12,461. The FTSE and the DAX rose about 5% each, while France’s CAC went up about 7%.
- The U.S.’ S&P 500 and the Dow hit record highs as the first successful late-stage clinical trial of a COVID-19 vaccine sparked hopes of the economy emerging from a pandemic-driven crisis. The Dow surged 5.7% in morning trade.
- The current valuations are quite stretched and the market has factored in a robust above-30% earnings growth in 2021, which will be quite challenging given the muted expectations [on] sharp revival in government and private capex. A sustainable rally in the long-term looks challenging.
- Mr. Biden’s plans to raise the H-1B visa limit and remove country quotas for green cards was a positive for Indian IT firms.
- India may gain as the U.S. under Mr. Biden is unlikely to ease pressure on China.