Benchmark indices Sensex and Nifty have extended early gains to now trade more than a third of a percent higher, with broader markets clocking gains of over a percent, as stocks price in an increased likelihood of Donald Trump winning the race for White House.

The Nifty IT index is sharply higher with over 2.5% in early trade, ahead of Nasdaq futures that is higher by 1.3 percent.

The counting of votes is underway to decide if Donald Trump or Kamala Harris will secure the US Presidential race, but early trends indicate Trump's possible return to power. 

These early trends have also boosted domestic investor sentiment, as many believe Trump's return could enhance prospects for India, particularly with the likely acceleration of the China 1 bet.

At 09.37 am, the Sensex was up 266.13 points or 0.33 percent at 79,742.76, and the Nifty was up 109.30 points or 0.45 percent at 24,322.60. The market breadth also tilted heavily in favor of gainers as nearly four stocks rose for each one that fell. About 2,320 shares rose, 612 fell, and 115 were unchanged.

Analysts at Emkay Institutional Equities speculated that a Republican sweep could trigger an initial rally, with the possibility of a temporary boost to India from foreign portfolio flows. However, sustaining any gains will hinge on the fundamentals of earnings growth and stable valuations—both of which face headwinds.

Stocks in Focus

Among individual stocks, Apollo Hospitals and Dr Reddy's Labs were the top gainers, up over 2 percent each. While shares of Apollo rose amid expectations of strong Q2 earnings, due later today, those of Dr Reddy's gained after the drugmaker posted decent quarterly results, marked by its highest-ever revenue.

On the flipside, metal names like JSW Steel, Hindalco, and Tata Steel were the major laggards amid concerns of trade wars with China as Trump leads the race to become the next US president. However, it was Titan Co that took the biggest plunge, falling over 3 percent after reporting a weak set of earnings in Q2.

Sectors in Focus

All sectoral indices, barring Nifty Metal traded in the green. The Nifty Metal index was down over a percent while other sectoral indices like information technology, healthcare, and realty rose 1-2 percent.

As for the broader market, which houses small and midcaps, buying remained strong. The BSE Smallcap and the BSE Midcap indices rose around a percent each.

On the technical front, Akshay Chinchalkar, Head of Research at Axis Securities cited that Nifty's rebound in the previous session traced a bullish "piercing line" formation with the market's high-to-low range contained within the day Monday's range. "That means the near-term move will be dictated by whether Monday's high or low breaks first. Recent options positioning in the Nifty and the Bank Nifty shows that trader sentiment has turned positive," Chinchalkar added.

Levels to Track

Further, he pegged near-term resistance for Nifty inside the 24,420 - 24,542 zone while key and critical supports are at 24,074 and 23,780 respectively.