Tag: financial news

On Monday, Indian benchmark equity indices fell significantly, impacted by declines in banking, financial, and IT stocks, as investors remained cautious ahead of the U.S. presidential election and the potential for further interest rate cuts by the Federal Reserve.

The BSE Sensex dropped by 1,409 points (1.77%) to 78,316, while the Nifty50 fell by 454 points (1.87%) to 23,850 around 10:58 am. The total market cap of all companies listed on the BSE saw a reduction of Rs 8.44 lakh crore, bringing it to Rs 439.66 lakh crore.

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

1. 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.
2. 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.
3. 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.
4. 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.