Today’s stock market: The Sensex and Nifty 50 both fell over 2% as the Indian stock market experienced a widespread selloff. A ₹9 lakh crore drop in market capitalization resulted from a 2% dip in mid and small-cap indices.
Indian stock market today, 4 Nov
On Monday, November 4, the Indian stock market saw a selloff that was widespread, with the mid- and small-cap divisions falling more than 2% and the benchmarks, the Sensex and the Nifty 50, collapsing about 2% each.
The Sensex began trading at 79,713.14, after closing at 79,724.12, and plummeted by over 2% to 78,232.60. Compared to its previous closing of 24,304.35, the Nifty 50 began at 24,315.75 and dropped 2% to 23,816.15.
In contrast, the BSE Smallcap and Midcap indices experienced a 2% decline.
Investors lost almost ₹9 lakh as the total market capitalization of BSE-listed companies fell to almost ₹439 lakh crore from ₹448 lakh crore in the previous session.
Why is the stock market down today here are 4 reasons
1. Exercise caution before the US election
The market is responding to the anxiety surrounding the US election. Opinion surveys suggest that Democratic candidate Kamala Harris and Republican candidate Donald Trump will face off in a close contest, raising questions about the election’s result.
“Markets throughout the world will be watching the US presidential election over the next several days, and the election’s conclusion may cause short-term volatility. However, this is probably only going to last a short while, and the market movement will be influenced by economic fundamentals like US GDP, inflation, and Fed activity,” stated V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2. FPIs’ sharp selloff- Foreign portfolio investors (FPIs) are heavily selling off the Indian stock market, and domestic institutional investors (DIIs) are also being cautious in light of this week’s significant international developments.
“After a week of stability, the Nifty and Sensex have resumed their downward trend, primarily as a result of strong selling by FIIs. In addition to FIIs booking profits ahead of the crucial forthcoming US elections, money outflows from India to China are being driven by the prospect of another stimulus package from China. Furthermore, Santosh Meena, Head of Research at Swastika Investmart, stated that DIIs seem to be ignoring these significant world events.
3. Uncomfortable valuations-Experts do not believe that the valuation situation has significantly improved despite the recent drop. The price-to-earnings ratio of the Nifty 50 at 22.7 is currently higher than the two-year average at 22.2 and close to the one-year average at 22.7, per the equity research platform Trendlyne.
“The market’s overall rich multiples have not changed much as a result of the recent drop. The comfort and long-term progress of India are major reasons why they are here to stay. “Since stock-specific corrections have been significantly higher, things have improved significantly,” stated Pankaj Pandey, ICICI Securities’ head of research.
4. The Fed’s role-Experts predict a 25 basis point rate drop at the US Federal Reserve’s policy announcement on November 7. But since the market is probably already priced in, this might not affect it.
“Generally speaking, it is anticipated that the US Fed will implement a 25 basis point drop, but this could be nullified because both of the contenders for the US election are promoting significant expenditure, which would result in a larger fiscal deficit and higher bond yields. Bad News
