As the US presidential election dust settles, traders will be scouring for likely winners from the regime change, with sectors like IT, chemicals, and pharma in the spotlight. However, Nifty futures point to a subdued start despite key Asian markets trending higher and US equities posting their biggest single-day jump in two years. The question on every trader’s mind is whether the Nifty 50 can build on Wednesday’s rally, with a critical resistance level just a few hundred points away.
Swiggy IPO sees slow start amid US election buzz
Swiggy’s $1.3 billion IPO evoked a tepid first-day response, with timing playing a part. The launch happened alongside the US election results, which drew investors’ attention toward stocks that would benefit from Donald Trump’s return to the White House. Only about 12 per cent of the shares on offer were subscribed, though surprisingly, half of the retail investor portion was snapped up. With big names like Fidelity International, Invesco, and some sovereign wealth funds backing the IPO, it’s likely to be fully sold by the end. However, based on current grey market trends, chances of a bumper listing-day gains is still uncertain.
Trump’s win sparks surprise rally in IT
Technology shares were the surprise winners, defying the popular belief that a Trump win would hurt the sector due to his stance on immigration and outsourcing. One reason for the rebound could be bears covering their short positions now that the uncertainty around the election is over. Another factor could be expectations of a strong dollar under the Trump regime, given his bias toward higher interest rates. Still, with a cautious outlook on earnings growth, buyers may be hesitant to pile in at higher prices.
Cyclicals make a comeback on hopes of global growth
From Adani Group stocks to infrastructure names, companies tied to the economy saw strong gains on Wednesday. The reason? Trump’s focus on tax cuts and deregulation is expected to boost economic activity in the US, which could benefit the rest of the world as well. In India, infrastructure stocks have underperformed since the general elections in June, with investors shifting toward defensive sectors. But if the US economy continues to thrive, investors might once again flock back to cyclical stocks.
The Nifty has climbed back to where it was two weeks ago, and now all eyes are on the 24,700 mark. At this level, the benchmark index faces two key hurdles: the 100-day moving average at 24,696, and the neckline of a three-month head-and-shoulders pattern at 24,694, which has turned into resistance. If Nifty breaks past these points, bulls could have a clear path to take the gauge to the 50-day moving average at 25,050.
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