Sensex down by 1000 Points, Nifty 50 drops below 24,000

Summary: Stock market crashes after Diwali. Sensex and Nifty both go down rapidly.

The Sensex and Nifty 50 fell more than 1% as the Indian stock market suffered a widespread selloff. The market cap dropped by ₹9 lakh crore amid the drop in mid- and small-cap indices up to 2%.

The BSE Sensex was down by 1000 pts, and the Nifty 50 was below the mark of 24,000.

The BSE Sensex was down 1,171 points, or 1.47%, at 78,552.73 at 10:53 AM. The Nifty 50 was down 386 points, or 1.59%, at 23,918.00.

The primary causes of the initial fall in Indian stock markets were the banking, IT, and financial sectors. Investor sentiment remained cautious due to the impending U.S. presidential election and potential rate changes by the Federal Reserve.

Reliance Industries, ICICI Bank, HDFC Bank,  Infosys, and Sun Pharma collectively caused a major 420-point drop in the Sensex. Tata, TCS, Axis Bank, and L&T had also put some extra pressure on the decline.

Investors lost around ₹9 lakh crore in a single session as the total market capitalization of BSE-listed companies fell to almost₹439 lakh crore from ₹448 lakh crore in the previous session.

The sector indices witnessed a 2-3 percent decline in Nifty Oil & Gas, Media, Consumer Durables, and Realty, and a 1% decline in Auto, FMCG, Nifty Bank, Metal, FMCG, and PSU Bank.

What could be the possible reason for the crash today?

• The major reason is the upcoming U.S. presidential elections between Donald Trump and Kamala Harris, which has created some uncertainty among investors.
  
  

• The Chief Investment Strategist at Geojit Financial Services, Dr. V K Vijayakumar, said, “In the next couple of days, markets globally will be focused on the US presidential elections, and there can be near-term volatility in response to the election outcome. However, this is likely to be short-lived, and economic fundamentals like US growth, inflation, and Fed action will influence the market trend.
  
  

• The market uncertainty is also fueled up after the Federal Reserve’s policy meeting on November 7, due to which investors are expecting a drop in the rates.
  
  
• Dr. Vijayakumar also said, “The Indian market is facing headwinds from decelerating earnings growth. Nifty EPS growth as indicated by Q2 results may dip below 10% in FY25, which will render the present valuations of about 24 times estimated FY25 earnings difficult to sustain. FIIs may continue to sell in this difficult earnings growth environment, constraining any rally in the market,” which has again increased the uncertainty in investors.
  
  
• According to experts, the Indian stock market has recently tried multiple times to reverse the downward trend, but it has failed due to a lack of new catalysts.
  
  
• The Chief Market Strategist at Geojit Financial Services, Anand James, has pointed out that while the 24,150 mark was steady several times last week, preventing more drops, the upward spark was weak. This resulted from resistance between 24,470 and 24,540, with other barriers close by between 24,660 and 24,770.