Gains across sectors - led by banking and financial services shares - pushed the markets higher
Extending a rally for the fourth day in a row, domestic equity benchmarks Sensex and Nifty soared to their highest levels recorded in nearly nine months. The S&P BSE Sensex index surged 727.84 points - or 1.79 per cent - to touch 41,343.98 at the strongest level during the session, and the broader NSE Nifty 50 benchmark jumped to as high as 12,115.25, adding 206.75 points to its previous close. Those marked the highest intraday levels for both indices since February 20. (Track Sensex, Nifty)
The Sensex closed 724.02 points (1.78 per cent) higher at 41,340.16 - its highest since February 13, and the Nifty settled at 12,120.30 for the day, up 211.80 points (1.78 per cent) from its previous close.
IndusInd Bank, Hindalco, SBI, Bharat Petroleum and Tata Steel, closing between 5.13 per cent and 6.19 per cent higher, rose the most among 48 gainers in the Nifty basket of 50 shares.
Reliance Industries, Kotak Mahindra Bank and HDFC Bank contributed more than 200 points to the gain in Sensex, and were its biggest boosts.
"The close fight for US Presidential candidate and a Republican majority in US Senate has reduced the chances of tough decisions like higher tax incidence in the US. This coupled with hope of more COVID-19 stimulus in US and also stimulus in India around Diwali have led to a risk-on rally," Prasanna Pathak, head of equity and fund manager at Taurus Mutual Fund, told NDTV.
SBI shares ended 5.63 per cent higher at Rs 218.70 apiece on the BSE, a day after the country's largest lender by assets reported strong earnings in the July-September period.
"Strong earnings and management commentary by many domestic companies indicates a better-than-expected recovery in the economy," Mr Pathak added.
At the current levels, both the indices have recovered nearly all of their losses so far this year. The 50-scrip benchmark is less than 50 points (0.40 per cent) shy of turning positive on a year-to-date basis.
Equity markets elsewhere in Asia soared to three-month highs, and bonds continued a rally, as investors awaited a clear result from the US election.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed 2 per cent to its highest since February 2018, whereas Japan's Nikkei 225 benchmark rose 1.1 per cent to a nine-month high.
Analysts say that in either case, the US elections may have a limited impact on domestic markets.
"Trump or Biden, it will not be a big difference for Indian markets... since both the US parties are bullish on India," Kochi-based Geojit Financial Services' head of research, Vinod Nair, told NDTV. (Also Read: Trump Vs Biden - What It Means For Indian Markets)
The risk of a prolonged contested election remained, though the count was progressing in an orderly fashion with Democratic challenger Joe Biden narrowly ahead of President Donald Trump in key states. Mr Biden remained optimistic on winning while the Republican incumbent filed lawsuits and demanded recounts.
The Supreme Court adjourned to November 18 a key hearing of a batch of petitions on whether borrowers should be made to bear interest on interest for delayed loan repayments on account of COVID-19.
Also, a deadline given to banks and other financial institutions to pay the difference in compound interest and simple interest on repayments due during March-August ends later in the day.
