The Indian stock market crashed on the day after the US election results showed a victory for Republican candidate and former President Donald Trump. In sharp contrast, the US markets rose after the poll results.
At 2 pm IST, the benchmark BSE Sensex fell to 79,583.40, which was down 794.73 points or 0.99% from the previous day’s close, while the Nifty fell to 24,215.80 at the same time, which is 268.25 points or 1.1% down from the previous close.
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How did the US markets perform after the elections?
In sharp contrast, the US stock market had surged. On November 7, The Nasdaq Composite Index rose by 544.30 points or 2.95% to $18,983.47, while the S&P 500 rose by 146.28 points or 2.53% to $5,929.04, the Dow Jones Industrial Average rose by a record 1,508.05 points or 3.57% to $43,729.93, and the Russell 2000 reached $2,392.92, climbing by 132.07 points or 5.84%.
However, on November 6, the Indian stock markets rallied.
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The Sensex closed at 80,378.13, which was up 901.50 points or 1.13% from the previous day’s close, while the Nifty rose to 24,484.05 at the same time, which is 270.75 points or 1.12% up from the previous close.
Why did Indian stock market fall and the US stock market rise?
The Indian stock market fell due to a multitude of reasons including the expectations of the US Fed to cut rates by 25 basis points, the rupee falling to a low of 84.3587 to the dollar, and foreign investors selling equities worth ₹4,445.59 crore on Wednesday, according to a Moneycontrol report.
Meanwhile, the US markets rose because of an expected era of deregulation and other pro-business laws and policies, according to a CNN report.
Which sectors and companies fell the most in India?
Among the Nifty sectoral indices, Nifty Metal, Pharma, and Midsmall Healthcare fell the most by 2.75%, 1.75%, and 1.32% respectively.
Except for PSU banks, all sectors were in the red.
Among the Sensex companies, Tech Mahindra fell the most at 2.56%, followed by Tata Motors at 2.27%, Sun Pharma at 2.21% and IndusInd Bank at 2.19%.
Of the 30 Sensex companies, all were in the red except for SBI and TCS which rose 0.40% and 0.22% into the green respectively.
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The drop is “more of a technical pullback with some investors trying to use the rally in the previous session to book profits,” a Reuters report quoted Sunny Agrawal, an analyst at SBICaps Securities, as saying.
“The other, more deeper concern is over foreign flows. A rise in the U.S. Treasury yields in anticipation of a tariff hike on imports by Trump and the consequent rise in U.S. dollar index and inflation could hurt foreign inflows to India,” Agrawal said.