 "Rs 10 lakh crore wiped out at Sensex, Nifty bulls have worst Diwali in 10 years")
Diwali, the festival of lights, brings cheer for Indian markets, however, the benchmark equity indices – BSE Sensex and Nifty50 – are bleeding, leaving several investors upset.
Sensex during the trade hours on Friday fell over 900 points, while Nifty slid below the 24,100-mark.
The market capitalisation of all listed companies on the BSE fell by Rs 9.8 lakh crore to Rs 435.1 lakh crore.
It’s not just today (October 25, 2024), in the last one month, Nifty fell nearly 6 per cent, while Sensex lost more than 4,800 points, making it the worst pre-Diwali phase for investors in a decade.
According to a report by The Economic Times, since 2014, there have been only four instances where Nifty has given negative returns one month before Diwali with the average return being 0.84 per cent.
Reasons behind market crash
Sensex and Nifty were trading disappointingly low due to lackluster Q2 earnings and continuous foreign outflows.
The sharp decline in the Indian stock market was driven by disappointing Q2 results from private lender IndusInd Bank and power company NTPC.
Stocks of IndusInd Bank, M&M, L&T, and ICICI Bank pulled down Sensex by 445. Reliance Industries, HDFC Bank, SBI, and NTPC also contributed to the fall.
Poor Q2 earnings
The Indian benchmark indices came under pressure after several blue-chip and other companies reported disappointing Q2 results, upsetting investors and souring their sentiment.
In today’s trading, IndusInd Bank fell 19 per cent, while NTPC dropped 4 per cent.
Impact Shorts
More ShortsBoth blue-chip stocks declined following disappointing quarterly results.
FIIs pullout from Indian market
In the past 19 trading sessions, foreign investors have pulled out money from Indian stocks and put them in China due to Beijing’s stimulus measures and relatively cheaper valuations.
By October 24, selling by foreign institutional investors (FIIs) Rs 98,085 crore.
Strong dollar & US Presidential polls
The November 5 US Presidential election is also keeping investors cautious. There has been rising speculation of Republican Donald Trump’s win against Democrat Kamala Harris which is supporting US yields and strengthening the dollar in recent days.
Less chance of aggressive rate cuts
Sentiments of investors are a bit firm as they are currently pinning hope of a 95.1 per cent chance of a 25-basis-point cut at the Fed’s November meeting, with a 4.9 per cent probability of the US central bank holding rates steady.
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