Athira Sethu
Kochi, 4 November 2024
The US Presidential election roiled the Indian equity market on Monday as investors lost around Rs 6 lakh crore owing to the deep fall in key market gauges- Nifty & Sensex. While Sensex fell over 900 points, Nifty50 closed below the 24,000 level amid a spike in the volatility index.
Some of the reasons stated to be causing general pessimism in the market are investor apprehension ahead of the US presidential elections. According to analysts, the results of these elections would be a cause of turbulence. The US Federal Reserve monetary policy meeting on November 6-7 is another reason investors are feeling uncertain about the market direction.
Attention is also focused on China, where the National People’s Congress was set to meet from November 4 to 8 to consider stimulus measures meant to boost its economy. Investors want to know how these moves can reorient global market sentiment.
Reports started trickling in of slack demand both in rural as well as urban markets, which resulted in slower FMCG sales. Analysts have forewarned that the FY25 earnings growth may slip in to below 10% threshold and that would pressure the prevalent market valuations.
The decline in the market has been aided by investor profit-taking; many investors have “sold on any rise” awaiting significant events on the horizon. In the auto space, Bajaj Auto was the worst affected falling by 5% as sales data for October failed to impress. Maruti Suzuki and Hyundai also fell.
Cryptocurrency investors prepare for higher Bitcoin volatility linked to the US elections, which surged in October. Shares of oil marketing companies fell as much as 5% after Goldman Sachs sounded a negative note for the sector.
The selling by FIIs has been rather significant during the last couple of months and significantly affected the performance of the markets. Outflow from Indian market stock equated to a historic level of Rs 94,000 crore for the month of October, touching a record level for a single month.
Analysts are of the opinion that the outcome of the US presidential election will provide the trigger for the future direction of the market.
