US Midterm Election Results: Indian stock markets gained, as well as gold and silver prices staged a strong rebound on Wednesday, November 4, after Democrats swept the US midterm elections, dealing a major political setback to President Donald Trump.
The outcome weakened the US dollar and Treasury yields, supporting precious metals, while improving global risk sentiment lifted expectations of stronger foreign investor flows into emerging markets, including India.
On the Multi Commodity Exchange (MCX), gold rose 2.5% to an intraday high of ₹1,42,957 per 10 grams, while silver jumped more than 4% to ₹1,87,422 per kg. Internationally, bullion advanced as much as 2.5% to near $4,030 an ounce, marking its biggest intraday gain since August. Silver climbed as much as 4.1% to just below $52 an ounce.
US midterm election results: Why gold and silver prices rebounded
Democrats won control of both chambers of the US Congress, as voter frustration over the cost of living and the war in Iran triggered a widespread rebuke of Trump and the Republican Party. Markets interpreted the outcome as potentially limiting the administration’s ability to pursue a deficit-expanding agenda over the next two years.
US Treasury yields declined across the curve, while the dollar weakened as much as 0.4%, its steepest fall in two months. Lower yields tend to support gold, which does not pay interest, while a weaker dollar makes bullion cheaper for buyers holding other currencies.
However, the rebound came after a difficult period for precious metals. Gold fell almost 7% in October and slipped below $4,000 an ounce towards the end of the month. It had also lost more than a fifth of its value since the US-Iran conflict erupted in late February, as inflation concerns raised expectations of tighter monetary policy.
The outlook remains sensitive to developments in West Asia. Washington and Tehran were reviewing fresh proposals from mediators to resolve their differences and avoid a return to all-out war. Oil prices also remained volatile amid uncertainty over the negotiations.
Stock Market Today
Indian stock markets extended their winning streak for a fifth consecutive session today following Trump’s defeat in the Midterm elections. The Nifty 50 closed at 23,960.60 on Wednesday, gaining 149.75 points or 0.63%, while the Sensex settled at 77,301.40, up 383.55 points or 0.50%. Buying in midcap and smallcap stocks further strengthened market breadth.
However, whether the rally in domestic equities can sustain itself and push the Sensex and Nifty towards fresh record highs will depend on earnings, global cues and the movement in crude oil prices.
Vinod Nair, Head of Research at Geojit Investments, said the US election outcome had improved global sentiment and could support foreign institutional investor flows into emerging markets.
““Diwali fireworks” continued on Dalal Street, with mid- and small-caps extending their outperformance as risk appetite strengthened. The U.S. midterm outcome improved global sentiment, raising expectations of a more measured approach to trade and tariff policies and potentially supporting FII flows into emerging markets. Domestically, optimism around possible tax relief maybe in the upcoming Union Budget, better-than-expected quarterly earnings and resilient festive consumption added momentum to the rally. Improving earnings visibility and healthy domestic demand should keep the near-term bias constructive, although geopolitical risks and crude oil volatility could trigger intermittent profit booking,” said the expert.
Sensex, Nifty outlook: Can they hit new highs?
Meanwhile, Dheeraj Gaur, Chief Investment Strategy Officer at Choice Wealth, projected further upside over the next 12 months signalling new highs, while cautioning that a sustained oil shock could derail the recovery.
“Our 12-month base case puts the Nifty around 26,500–27,000 and the Sensex near 86,000–88,000 (~3.25x Nifty). This is based on two assumptions: corporate earnings sustain low-to-mid-teens growth and the market re-rates modestly from today’s below-average multiple as the crude and geopolitical overhang eases. A sharper, sustained oil shock is the main downside, during which the Nifty levels of 21,000-21,500 may well get tested,”
ICICI Bank, however, noted that a Democrat sweep was unlikely to change the course of the West Asia war or trigger major policy reversals on trade, tariffs and immigration. However, it could lead to greater congressional scrutiny of the Trump administration’s tariff policies.
Nifty technical outlook: Key levels to watch
The Nifty 50’s technical indicators are pointing to further upside after the index broke above its key 200-day moving average and market breadth improved, with midcap and smallcap stocks also joining the rally. However, after five consecutive sessions of gains, analysts expect some consolidation, with 24,200 emerging as the next level to watch, followed by the 24,400–24,700 zone.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said the Nifty had moved above its 200-day exponential moving average (EMA) near 23,900, with the technical structure continuing to favour the bulls.
“A long bull candle was formed on the daily chart that has surpassed the key upper area of 200day EMA around 23900 levels. Though, Nifty placed at the highs, still there is no indication of any tiredness/reversal emerging from the highs.
After a subdued movement in the last few sessions, the market breadth has improved significantly on Wednesday with midcap & smallcap closed higher by 1.5% to 2% respectively. This is positive indication.
The underlying trend of Nifty continues to be positive and the next upside to be watched around 24300-24400 levels in the near term. Any dips could find support around 23700 levels.”
Ajit Mishra, SVP – Research at Religare Broking, said some consolidation could follow five consecutive sessions of gains. He highlighted 24,200 as the next level to watch, followed by the 24,400–24,700 zone, with immediate support at 23,200–23,500. He also emphasised selective stock picking and avoiding loss-making counters that were lagging the recovery.
The improving technical picture and global sentiment offer support to the domestic market, but a sustained move towards record highs will require continued earnings strength, foreign investor participation and stability in crude oil prices.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.