Obama win fuels global mkt rally
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Investor sentiment across economies got a shot in the arm after Barack Obama won the US presidential elections, defeating Mitt Romney, who had clearly expressed his discomfort with the financial stimulus package. The verdict was hailed by markets across the globe, with most leading equity indices gaining ground on Wednesday. It is being widely expected that Obama's return to the White House would lead to a period of low interest rates and high liquidity – on account of quantitative easing — in the US that will flow towards the fast-growing emerging market economies.
Indian equity indices also rallied along with their Asian counterparts during the early part of the trading session before some amount of profit-booking took away some of the gains. The 30-share Sensex gained more than 150 points to touch a high of 18,973, before closing at 18,897, up 79 points or 0.42%. The broader Nifty ended the day at 5,760.10, up 35.70 points.
"The combination of low interest rates, high liquidity and low growth prospects in the developed countries will drive global investors to chase higher yielding assets like emerging markets and that should benefit India," said Ajay Srinivasan, CEO, Aditya Birla Financial Services.
Elsewhere in Asia, Hang Seng also rallied 0.71% or 155 points, with Taiwan Weighted and Kospi gaining 0.70% and 0.49%, respectively. In Europe, FTSE, CAC 40, DAX and all other benchmark indices traded in the green.
"A second term for Obama is likely to mean a continuation of the Federal Reserve's easy money policy. This will have a beneficial impact on emerging markets like India and institutional investors look for value," says Rashesh Shah, chairman & CEO, Edelweiss Group.
Meanwhile, early indications from the US also hinted at a gap-up opening for Dow Jones and the S&P500. Incidentally, 20 companies in the S&P 500 are due to release earnings today, including Time Warner and Kraft Foods Group. According to Bloomberg, of all index members to report third-quarter results, 70% have topped analyst estimates for earnings, while 60% missed sales projections.
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