Equity benchmark Sensex rallied over 500 points in early trade on Thursday, tracking gains in index-heavyweights Reliance Industries, Infosys and SBI, amid positive cues from global markets. The 30-share BSE index was trading 513.84 points or 1.27% higher at 41,129.98. Similarly, the broader NSE Nifty climbed 143.20 points or 1.20% to 12,051.70. At the time of writing, the Sensex was 662.68 up, trading at 41,278.82, and the Nifty 191.50 points up at 12,100.
This comes as the results of the US election are yet to be announced, and investors seemed upbeat with the prospects of Joe Biden winning the US Presidential elections as he continued to maintain a slim lead over Donald Trump. However, Republicans are continue to have a majority in the Senate, which implies that the prospect of higher taxes and financial regulations even if Biden is the next president, slim.
Incumbent Republican President Donald Trump moved ahead with his plan to mount a massive legal battle. Biden is falling short of six to 17 Electoral College votes, according to the projections made by various media outlets. Trump's count for the Electoral College votes stood at 214, with his path to victory getting narrower.
The US Federal Open Market Committee is also scheduled to release its latest policy statement.
SBI was the top gainer in the Sensex pack, surging over 5%, followed by HCL Tech, Tech Mahindra, Asian Paints, Infosys, Tata Steel, TCS and Reliance Industries. On the other hand, ONGC and Titan were the laggards. In the previous session, Sensex ended 355.01 points or 0.88% higher at 40,616.14, while Nifty climbed 95 points or 0.80% to 11,908.50.
Foreign institutional investors remained net buyers in the capital market as they purchased shares worth Rs 146.22 crore on a net basis on Wednesday, according to provisional exchange data.
According to Arjun Yash Mahajan, Head Institutional Business at Reliance Securities, Wall Street rebounded sharply for the third consecutive day despite the outcome of the presidential election looking to be too close.
"Looking at market reactions, it appears that investors seem to be cheering about the possibility of a divided USA government as political gridlock might not lead to increase in corporate tax rates," he said.
India's trade set up looks to be strong as of now mainly on global cues, he said, adding that volatility in the market may continue to persist.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading with significant gains in mid-session deals. Meanwhile, international oil benchmark Brent crude was trading 1.29% lower at $40.70 per barrel.
With inputs from PTI