Stock market decline wiped out around ₹8.44 lakh crore in investor wealth on Monday as Indian benchmark indices fell sharply amid caution over the U.S. presidential election, Federal Reserve policy and weak corporate earnings.
The BSE Sensex dropped 1,409 points, or 1.77%, to 78,316, while the Nifty 50 declined 454 points, or 1.87%, to 23,850. The sharp fall was led by banking, financial and IT stocks, while rising crude oil prices added to concerns among investors.
Stock Market Decline: Key Highlights
Top losers on the Sensex included Reliance Industries, Infosys, ICICI Bank, HDFC Bank, and Sun Pharma, which together contributed to a 420-point drop. Other major players like L&T, Axis Bank, TCS, and Tata Motors also added to the decline. Sector-wise, indices for Nifty Bank, Auto, Financial Services, IT, Pharma, Metal, Realty, Consumer Durables, and Oil & Gas recorded losses between 0.5% and 1.7%. Meanwhile, the India VIX, a measure of market volatility, rose by 5.2%, reaching 16.73.
Key Factors Behind the Market Decline
- Caution Ahead of the U.S. Election
Investor sentiment in India was affected by the uncertainty of the upcoming U.S. presidential election on November 5, with a close race between Democratic Vice President Kamala Harris and Republican former President Donald Trump. - Anticipation of Fed Meeting Results
Investors are also cautious about the U.S. Federal Reserve’s policy meeting on November 7, where a quarter-point rate cut is expected. While this may encourage foreign investments in India, investors await the Fed’s stance, adding to market caution. - Weak Q2 Corporate Earnings
Disappointing Q2 results from Indian companies have further weighed on the market, with foreign investors offloading Indian stocks.“The Indian market faces challenges from slowing earnings growth, with Nifty’s estimated EPS growth for FY25 likely dropping below 10%. At current valuations of around 24 times FY25 earnings, sustaining a rally may be difficult,” said Vijayakumar. - Increase in Oil Prices
Oil prices surged over $1 early Monday following OPEC+’s decision to delay a planned output increase by one month. Brent futures rose by $1.18 to $74.28 per barrel, while WTI crude increased by $1.20 to $70.69 per barrel.
