Closing Bell: Market Ends Lower, Sensex & Nifty Plunge Ahead Of US Elections; Investors Lose Rs 9 Lk Cr

Indian stock markets suffered a sharp selloff on Monday, November 4, wiping out nearly Rs 9 lakh crore from the total market capitalization of BSE-listed companies. Both the benchmark indices, Sensex and Nifty, closed the day down over 1% each, with Nifty sinking below the crucial 24,000 mark to settle at 23,995, while Sensex tumbled by 942 points to end at 78,782. Despite recovering from intra-day lows, the market breadth remained deeply negative, with more than 40 of the Nifty 50 stocks closing in the red.

The Sensex plunged by 942 points to 78,782, and the Nifty shed 309 points to close at 23,995, losing its psychological support level. The Nifty Midcap 100 slipped 459 points to 51,215, while the Nifty Bank dropped 712 points to close at 55,785.

Major sectors took a hit, with Nifty Oil & Gas, Media, Consumer Durables, and Realty indices falling 2-3%. Nifty Bank, Auto, FMCG, Metal, and PSU Bank sectors were down over 1% each. The total market capitalization of companies listed on the BSE plummeted from Rs 448 lakh crore to around Rs 439 lakh crore.

Despite better-than-expected monthly sales figures, two-wheeler stocks took a significant hit. Both Hero MotoCorp and Eicher Motors closed lower, impacted by overall market pessimism. Bajaj Auto, which reported a drop in domestic sales for July, fell by 4%. Crude oil price hikes weighed on oil marketing companies, with some stocks declining as much as 6%.

Reliance Industries and HDFC Bank collectively contributed to a 70-point decline in the Nifty. Info Edge saw gains following a positive October Job Index report, while NMDC managed an uptick due to rising iron ore prices. Public sector bank stocks found buying interest at lower levels, helping them close above their session lows.

Firstsource recovered last week's losses with a 6% gain, and PVR Inox fell 7%, reflecting lukewarm responses to recent movie releases. The advance-decline ratio showed the extent of selling pressure, with four stocks declining for every one stock advancing.

With the US election looming, global markets are on edge. Investors are wary of potential volatility as polls indicate a close contest between Democratic candidate Kamala Harris and incumbent Republican Donald Trump, leading to uncertainty in both domestic and international markets.

Despite recent corrections, valuations remain a concern. The current price-to-earnings (PE) ratio for the Nifty 50 sits at 22.7, according to Trendlyne data, above its two-year average PE of 22.2. Many investors find these levels uncomfortable, leading to profit-booking in high-value stocks.

The US Federal Reserve's policy decision on November 7 is anticipated to include a 25-basis-point rate cut, yet this is largely priced in. Investors are uncertain about how the Fed's decisions might impact global liquidity and market sentiment.

Several companies have reported weaker-than-expected results for the September quarter, adding to fears of a slowdown. The earnings season has been a letdown, which has dampened investor sentiment, especially in the mid and smallcap segments.

Heavy selling by FPIs has added pressure on the market. This exodus from Indian equities has compounded the bearish sentiment, and domestic institutional investors (DIIs) have remained cautious as well, preferring to wait out the major global events.

The market's current volatility is likely to persist until greater clarity emerges around the US election, Fed policies, and the economic outlook post-Q2 earnings. Experts advise investors to stay cautious, especially in sectors with high valuations or limited earnings visibility. Sectors like FMCG and IT may remain under pressure in the near term, though analysts point to selective buying opportunities in beaten-down stocks, particularly in the energy and banking sectors.