Sensex, Nifty rise as IT stocks gain on stronger dollar

Indian shares rose for a third consecutive session on Wednesday as IT stocks gained after a close US presidential election pushed the dollar higher, with pharma stocks also providing support on the back of strong earnings from Sun Pharma.

The NSE Nifty 50 index rose 0.44 per cent to 11,869.55 by 0437 GMT and the S&P BSE Sensex gained 0.55 per cent to 40,480.31.

Early results in the US presidential election showed a very tight race between incumbent Donald Trump and his Democratic rival Joe Biden, prompting a jump in the dollar, while MSCI`s broadest index of Asia-Pacific shares outside Japan edged up 0.1 per cent.

"The policy of the United States will be positive towards India no matter which candidate wins the election," said Vinod Nair, head of research at Geojit Financial Services.

In Wednesday’s trading, the Indian rupee weakened by 0.37 per cent to 74.68 against the dollar by 0437 GMT, boosting shares of IT services companies that mostly earn their revenue in US dollars but report it in Indian rupees.

The Nifty IT index rose as much as 3.5 per cent, led by Infosys and Wipro which gained 3.5 per cent and 2.9 per cent, respectively.

"The positive dollar has a multiplier effect on margins of IT companies," Geojit’s Nair said.

Drugmaker Sun Pharmaceutical Industries rose nearly 5 per cent after the company reported upbeat profit for the July-September quarter, boosting the Nifty pharma index about 2.2 per cent.

The Nifty banking and financial indexes slipped 0.5% and 0.6%, respectively, snapping two sessions of gains.

India’s biggest lender State Bank of India fell 0.8 per cent ahead of its earnings, scheduled for later in the day.