Bihar Elections Impact on Markets as Global AI Rally Leaves India Behind

The domestic stock markets opened with little change on Thursday, as investors remained vigilant ahead of the Bihar assembly elections. This state poll is especially significant for investors due to the central government's reliance on coalition partners. At opening, the Nifty 50 recorded a minor decline, opening at 25,593.35, down by 4.30 points or 0.02%. Conversely, the BSE Sensex experienced a modest increase, opening at 83,516.69 with a gain of 57.54 points or 0.07%.

Experts in the market have pointed out that while the global markets are enjoying a robust rally fueled by advances in artificial intelligence, Indian markets are trailing. This underperformance is linked to tepid corporate earnings and the limited presence of AI-driven companies in India. Ajay Bagga, a Banking and Market Expert, stated to ANI, "The Indian markets are lacking momentum and are in search of catalysts. The absence of significant AI influences and persistent sluggish corporate earnings has resulted in India being generally underweighted for over a year. This trend, however, is expected to shift. Bihar's election results are under scrutiny, primarily due to the potential impact on the coalition government at the center. Normally, state elections have minimal market impact, but considering the coalition dependency of the central government, the Bihar election outcome may hold greater significance than usual."

In primary markets, Lenskart Solutions' IPO bidding concluded, with the allotment process set to occur today. The eyewear retailer experienced robust investor interest, with the public issue being subscribed 28.3 times by day three's end. Institutional investors predominantly led the subscription (18.2 times), followed by retail investors (7.5 times) and Qualified Institutional Buyers (QIBs) at 23.79 times. Lenskart's share debut is expected by November 6, 2025. Another IPO, by the digital investment platform Groww, remains open. Aimed at retail investors, Groww offers diverse investment options, including mutual funds, stocks, and IPOs. The public issue achieved a 57% subscription on the first day, primarily driven by institutional investor participation at 59%, retail investors at 1.91 times, and QIBs at 10%.

In the U.S., the Supreme Court examined tariffs imposed under emergency powers by the Trump administration, with skepticism voiced over the president's authority. A decision is anticipated by year's end. The case involves almost USD 100 billion in potential customs duty refunds. Bagga suggested that former President Trump might seek congressional ratification of the tariffs or reimpose them through alternative legislation, which would be a lengthy process. As the U.S. federal shutdown crisis enters its 36th day, the private payroll data for October still reflected strong employment figures, while the Atlanta Fed's GDPNow projection for Q3 GDP growth remains high at 4%. Nevertheless, mounting concern exists as the FAA warned of a 10% reduction in domestic flights from Friday if the shutdown continues, impacting unpaid air traffic controllers and TSA agents.

Domestically, significant Indian companies plan to release their 2QFY26 financial reports today, including names like Aarti Industries, Apollo Hospitals Enterprise, and Bajaj Housing Finance. Across Asia, markets were trading positively as investors capitalized on positive U.S. trade and monetary developments.

Commodities and oil prices, which initially saw declines, later turned around, while Bitcoin made a quick recovery after dipping below USD 100,000, climbing back above USD 102,000.