Benchmark indices hit record highs on Monday as Joe Biden’s win in the US Presidential election lifted global shares on hopes of better trade relations with China and another fiscal stimulus package.

Domestic stocks may build on their gains when trading resumes on Tuesday on Pfizer’s announcement that its vaccine is 90 per cent effective in preventing Covid-19.

Pfizer’s announcement led to a rally in global stock prices with US markets indicating a strong opening as Dow Jones Futures showed gains of more than 5 per cent even as other indices such as CAC 40 and DAX rose up to 7 per cent.

In Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended up to 2.12 per cent higher.

Despite rising coronavirus cases globally and concerns of expensive valuations, domestic shares have been in the positive territory because of better than expected results.

Expectations that corporate earnings will improve further in the next quarter and another stimulus from the central government could be in the works helped sentiments too.

Poll boost

Equities got a further leg up after Joe Biden won the US Presidential elections and a divided house in the US led to a feeling that there will not be any adverse corporate tax changes in the new regime.

Biden is likely to tone down the trade war rhetoric with China and focus on combating Covid-19 in the US, which should be positive for equities. Inflows from foreign portfolio investors have also been robust with data showing they have invested close to Rs 11,500 crore into equities in November.

Provisional data from the NSE showed that they made net investments worth Rs 4,548 crore on Monday.

Rising for the sixth straight session, the BSE Sensex on Monday rose 704.37 points, or 1.68 per cent, to close at its lifetime peak of 42597.43 after it touched a record high of 42645.33 during intra-day trade. The previous closing record for the Sensex was 41952.63, hit on January 14, 2020.

The broader NSE Nifty broke records when it settled 197.50 points, or 1.61 per cent, higher to finish at its all-time high of 12461.05. The index also hit a historic intra-day high of 12474.05 during the day.

Rupee slips

The rupee gave up intra-day gains to settle 7 paise lower at 74.15 against the dollar on Monday, tracking weaker Asian peers against the greenback. Higher crude oil prices also put pressure on it.

At the interbank foreign exchange, the rupee opened higher at 73.95 a dollar and gained strength to touch a high of 73.83 during the day.

It, however, finally settled at 74.15, 7 paise lower than its previous close.

Crude jumps

Oil prices jumped as investors greeted the vaccine news, shrugging off worries about lacklustre demand. Brent prices added 8 per cent to $42.6.

Oil prices were also supported by a weakening dollar and Biden’s victory, which boosted the demand for riskier assets and removed the election uncertainty from the market.

Saudi Arabia on Monday hinted at a possible price hike. Saudi Arabia’s energy minister Prince Abdulaziz bin Salman said the oil output cuts could be adjusted as it has been in the past if there is consensus among members of the informal producers’ group.