Stock market crash: Sensex falls 1,400 points, this is how much investors lost

Domestic investors were in for a shock on Monday as stock markets fell sharply due to a combination of factors, especially continued selling by foreign investors. The BSE Sensex fell 1,433.61 points to 78,290.51 at 11.15 am, resulting in a total market capitalization loss of over Rs 8 lakh crore.

The Nifty50 also fell sharply, down 458.45 points to 23,845.90, and most other broader market indices also fell sharply. which led to a massacre on Dalal Street.

Major contributors to the decline included Reliance Industries, Infosys, ICICI Bank, HDFC Bank and Sun Pharma, which together accounted for a 420-point decline in the Sensex. Other key laggards included L&T, Axis Bank, TCS and Tata Motors.

Sectoral indices for Nifty Bank, Auto, Financial Services, IT, Pharma, Metal, Realty, Consumer Sustainables and Oil & Gas saw declines ranging from 0.5% to 1.7%. Meanwhile, India’s VIX, a gauge of market volatility, rose 5.2% to 16.73.

WHAT CAUSED TODAY’S STOCK MARKET CRASH?

Concerns increased in a volatile market environment, driven by uncertainties surrounding the upcoming US presidential elections and possible interest rate decisions by the Federal Reserve. With major stocks across sectors taking a hit, investors continue to grapple with the fallout from this sharp market decline.

US election results: The uncertainty surrounding the November 5 US presidential elections has cast a shadow on investor sentiment in India. With Democratic Vice President Kamala Harris and Republican former President Donald Trump locked in a tight race, the potential economic implications have investors on edge.

Analysts warn that the election results could lead to different policy approaches affecting the Indian economy. A victory for Kamala Harris could prompt a more dovish stance from the US Federal Reserve, potentially allowing the Reserve Bank of India (RBI) to cut domestic interest rates, which would benefit non-banking financial companies (NBFCs). ).

On the other hand, a victory for Donald Trump could keep US interest rates high, leading to a persistent high interest rate environment in India and instead favoring public sector banks.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented: “In the coming days, global markets will be focused on the US presidential elections, which could lead to volatility in the short term. However, this will likely be short-lived as economic fundamentals such as US growth, inflation and Fed actions will influence market trends.”

The US Federal Reserve’s upcoming policy meeting on November 7 adds to the concerns in Indian markets. Analysts expect a potential rate cut of a quarter of a percentage point that could increase foreign investment inflows into India. Until there is clarity on the Fed’s position, investors are expected to remain cautious, which will further contribute to the current market decline.

Disappointing second quarter results: Investor sentiment was also negatively affected by disappointing second-quarter earnings by Indian companies, leading to a stock market downturn and prompting foreign institutional investors (FIIs) to offload Indian equities.

Vijayakumar said: “The Indian market is facing headwinds due to slowing earnings growth. The strong earnings per share growth seen in Q2 results could fall below 10% in FY25, making current valuations difficult to sustain. FIIs can continue to sell in this challenging earnings growth environment, limiting any market rallies.”

Rising oil prices: Oil prices rose more than $1 in early trading on Monday after OPEC+ announced a postponement of a planned production increase in December due to weak demand and increasing supply from outside the group.

Brent futures rose $1.18 per barrel (1.61%) to $74.28, while U.S. West Texas Intermediate (WTI) crude rose $1.20 per barrel (1.73%) to $70.69.