Oil prices plummeted after Trump's defeat in US elections, positively affecting the Indian stock market

Although Diwali has not yet arrived, the stock market today shows signs of a holiday, supported by signals from international markets. One of the key factors is the sharp drop in global crude oil prices. This occurred after Donald Trump's party suffered a crushing defeat in the US midterm elections, which triggered the collapse in crude oil prices.

The significant decline in oil prices, which had long negatively affected sentiment in stock markets worldwide, may lead to a strong rise on the exchange. Before the oil price drop, there was a decline, and after it became clear that Trump's party had lost, Brent Crude Oil prices fell sharply by approximately 10 percent. At the time of writing, the Brent Crude price was below $90 per barrel. The fall in oil prices reduces the threat of inflation, and media and social networks also report that the war between the US and Iran is ending.

The main reason for the expected surge in the stock market is the collapse in crude oil prices. Even before the results of the US midterm elections were announced, oil prices were declining, and after the defeat of Trump's party was confirmed, Brent Crude Oil prices suddenly dropped by almost 10 percent. At the time of publication, the Brent Crude Price traded below $90 per barrel. The decrease in oil prices helps reduce the risk of inflation, and media and social network reports indicate the end of the war between the US and Iran.

Thanks to Donald Trump's defeat in the American midterm elections and the significant drop in crude oil prices, the mood in global stock markets has improved. The American stock market is seeing growth, with the Dow Jones index rising by 3 percent, the largest jump in the last 18 months. Furthermore, most Asian markets opened with strong gains on Thursday. The Hong Kong Hang Seng Index rose by approximately 4 percent, and the UK FTSE-100 index traded with a gain of 2 percent.

Gift Nifty, considered a key indicator for the Indian stock market, shows continuous growth. During the events in America on Thursday, this index demonstrated a powerful start and, at the time of writing, was up an impressive 324 points. The rise of Gift Nifty and the fall in crude oil prices will support the upward trend in the Indian stock market, which has been continuing for the fifth day. In the previous trading day, Wednesday, the Sensex index closed at 77,301.40, showing an increase of 383.55 points, and the NSE Nifty closed at 23,960, increasing by 149.75 points.

Following the results of the midterm elections in the US, increased enthusiasm is observed on stock exchanges, and American markets are showing signs of significant growth. Similar growth is also noted in Asian markets. However, in India, this growth is driven not only by the results of the US elections but also by falling crude oil prices and expectations of a reduction in Long-Term Capital Gains (LTCG) tax.

During the 2026 US elections, Donald Trump's Republican Party suffered a serious defeat. The Democratic Party gained a majority in both chambers of the American parliament—the Senate and the House of Representatives. This is interpreted as an expression of voter dissatisfaction with the Trump administration. Previously, Democrats led in the House of Representatives with 224 out of 435 seats and in the Senate with 54 seats.

These results triggered a rise in the American market. The Dow Futures index shows a remarkable increase, rising by 770 points or 1.49 percent to 52,557. It should be noted that before the results were announced, this index fell by one percent but then recovered by approximately two percent from its low point.

Significant growth was also recorded in the Chinese market, where the index rose by 2.16 percent to 3,686.17, and the Hang Seng index saw a growth of 1.67 percent. Furthermore, the Kospi showed a growth of 0.62 percent, and the UK market grew by 0.30 percent.

The Indian market also demonstrated steady growth in the main indices Sensex and Nifty. The reason for this was the decrease in crude oil prices by about one percent and growing expectations of LTCG reduction. Nifty increased by 100 points, while Sensex grew by more than 350 points.

The results of the US midterm elections indicated an important shift in the future. Analysis of data from the past 11 periods since 1982 shows that in eight cases, the American benchmark index S&P 500 showed an average positive return of 10 percent over the following three months. ICICI Direct reported that in India, the stock index showed an average positive return of 12 percent in six cases since 1982.

Tanay Dalal, Senior Vice President of Economic Research at Axis Bank, noted that the Democrats' victory in the US midterm elections appears more convincing than many experts expected, and some traditionally strong Republican bastions are under pressure. He suggested that one possible consequence could be the adoption of a more divided approach to artificial intelligence (AI) regulation. For India, this could be a positive development, as a less unified regulatory environment can support demand for export business services and outsourced technology.

On the fourth trading day, there was a sudden shift in the dynamics of the Sensex and Nifty indices on the stock market. After a slow start to trading, both indices began to rise rapidly. The Sensex index, comprising 30 shares from the Bombay Stock Exchange, jumped by 600 points, while the Nifty of the National Stock Exchange rose by more than 150 points.

This significant growth is linked to events in the US. The stock market opened in the green zone, recovering from the previous day's decline. Although the initial rise was moderate, the situation changed sharply after about an hour, and both indices continued their upward movement at high speed.

The Sensex opened at 73,268, slightly above the previous day's close of 73,246, and then quickly reached 73,862. Similarly, Nifty, starting from a close of 22,690, rose to 22,874.

Among the companies that showed strong growth during this sudden market wave, large corporations were prominent. In the category of large companies on the BSE, stocks such as Adani Ports Share (4.10%), Power Grid Share (4.05%), Kotak Bank Share (3.10%), ITC Share (2.50%), Eternal Share (2.36%), and HUL Share (2.10%), as well as Jio Platforms Share (4.10%), saw gains.

Regarding mid-sized companies, stocks like Apl Apollo Share (3%), Paytm Share (2.90%), and Nykaa Share (2%) demonstrated an increase. Among small companies, growth was noted in Acutaas Share (6.50%), GESHIP Share (5%), Manappuram Share (4.50%), and CUB Share (4.20%).

There are three main reasons explaining this rise in the stock market. One is related to the US. The US Federal Reserve (US FED) announced on Wednesday that it would maintain the current policy rate. Furthermore, there is a decrease in crude oil prices. At the time of writing, the price of Brent Crude fell to $113. Additionally, foreign investor sentiment improved: FPIs made purchases worth about 900 crore rupees in the previous trading day, injecting vitality into the market.