BENGALURU: Indian shares rose for a third consecutive session on Wednesday as IT stocks gained after a close U.S. presidential election pushed the dollar higher, with pharma stocks also providing support on the back of strong earnings from Sun Pharma.
The NSE Nifty 50 index rose 0.44% to 11,869.55 by 0437 GMT and the S&P BSE Sensex gained 0.55% to 40,480.31.
Early results in the U.S. presidential election showed a very tight race between incumbent Donald Trump and his Democratic rival Joe Biden, prompting a jump in the dollar, while MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1%.
“The policy of the United States will be positive towards India no matter which candidate wins the election,” said Vinod Nair, head of research at Geojit Financial Services.
The United States is the fifth largest https://www.investindia.gov.in/country/united-states#:~:text=The%20US%20is%20the%205,were%20valued%20at%20%2449.4%20bn investor in India, according to New Delhi’s National Investment Promotion and Facilitation Agency. U.S. data shows the country has FDI positions https://www.selectusa.gov/servlet/servlet.FileDownload?file=015t00000003DBX of over $45 billion in India as of 2019.
In Wednesday’s trading, the Indian rupee weakened by 0.37% to 74.68 against the dollar by 0437 GMT, boosting shares of IT services companies that mostly earn their revenue in U.S. dollars but report it in Indian rupees.
The Nifty IT index rose as much as 3.5%, led by Infosys and Wipro which gained 3.5% and 2.9%, respectively.
“The positive dollar has a multiplier effect on margins of IT companies,” Geojit’s Nair said.
Drugmaker Sun Pharmaceutical Industries rose nearly 5% after the company reported upbeat profit for the July-September quarter, boosting the Nifty pharma index about 2.2%.
The Nifty banking and financial indexes slipped 0.5% and 0.6%, respectively, snapping two sessions of gains.
India’s biggest lender State Bank of India fell 0.8% ahead of its earnings, scheduled for later in the day.
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