The Indian stock markets opened on a bearish note on today, with the BSE Sensex and Nifty50 taking notable hits. The BSE Sensex dropped by over 1,100 points, while the Nifty50 fell below the critical 24,000 mark. By the morning session, the Sensex was trading at 78,552.73, reflecting a decline of 1,171 points or 1.47%, and the Nifty50 stood at 23,918.00, down by 386 points or 1.59%.
Investor sentiment remained cautious, largely influenced by upcoming global events and economic uncertainties. Sectors that led the decline included banking, financial services, and IT. The overall market dip led to a reduction in investor wealth by Rs 7.31 lakh crore, lowering the total market value of BSE-listed companies to Rs 442.54 lakh crore. Major players such as Reliance Industries, Infosys, ICICI Bank, HDFC Bank, and Sun Pharma collectively caused a 420-point drop in the Sensex, while companies like L&T, Axis Bank, TCS, and Tata Motors also faced significant declines.
Several sectoral indices recorded losses between 0.5% and 1.7%, including Nifty Bank, Auto, Financial Services, IT, Pharma, Metal, Realty, Consumer Durables, and Oil & Gas. Additionally, the India VIX, a measure of market volatility, rose by 5.2% to 6.73%.
Geopolitical tensions and global economic uncertainty have led to the current market downturn. Analysts project that this bearish phase may continue into mid-2025, after which a bull market may emerge as geopolitical tensions ease.
Reason behind the market’s decline
- A major factor influencing the current uncertainty is the upcoming U.S. presidential election, in which Kamala Harris faces off against Donald Trump. The election’s outcome could impact the U.S. Federal Reserve’s policy direction, which in turn may have a ripple effect on Indian interest rates. Global markets are expected to remain volatile in the days leading up to and following the election results.
- Adding to this uncertainty, the U.S. Federal Reserve’s policy meeting scheduled for November 7 has kept investors on edge, with a potential rate cut further influencing market behavior.
- Further compounding the financial market pressures, oil prices saw an increase early Monday. Brent crude rose by $1.18 (1.61%) to $74.28 per barrel, while WTI crude climbed by $1.20 (1.73%) to $70.69. The price surge came after OPEC+ announced a delay in its planned December output increase of 180,000 barrels per day, citing weak demand and an increase in non-OPEC supply.
The current volatility in Indian markets reflects a convergence of global economic challenges, geopolitical concerns, and policy uncertainties. With crucial events like the U.S. presidential election and Federal Reserve policy meeting on the horizon, market participants remain cautious.
