Sensex, Nifty plunge again: ₹8L crore wiped out from market
India's benchmark equity indices witnessed a major drop today, with the Sensex losing nearly 800 points and the Nifty slipping to 24,100 after dropping 300 points. The crash was mainly driven by disappointing Q2 earnings from IndusInd Bank and NTPC, along with sustained foreign outflows. Following the market crash, the total market capitalization on the Bombay Stock Exchange (BSE) fell by ₹7.7 lakh crore to ₹436.1 lakh crore.
Key contributors to the market decline
Several major companies such as IndusInd Bank, M&M, L&T, and ICICI Bank were major contributors to the Sensex's fall. The disappointing Q2 results of a number of blue-chip and other companies have weighed on the benchmark indices. IndusInd Bank plunged 19%, adding 130 points to the Sensex's loss. Other heavyweights such as Reliance Industries, HDFC Bank, SBI, and NTPC also contributed to the downturn. On a sectoral level, indices such as Nifty Auto and Bank fell between 2% and 3.6%.
Foreign investors redirect funds to China
Foreign investors have been selling Indian shares for the last 19 sessions, redirecting their funds to China amid Beijing's stimulus measures and relatively cheaper valuations. This trend has led to sustained selling by foreign institutional investors (FIIs), which stood at ₹98,085 crore by October 24. The shift in investment is yet another factor contributing to the current market downturn in India.
US bond yields and strong dollar impact Indian market
Rising US bond yields and a stronger dollar are typically negative for the Indian equity market as they can prompt foreign fund outflows and raise import costs, affecting corporate earnings. The 10-year Treasury yield stood at 4.1918% on Friday, after a four-basis-point decline in the previous session but still remains high above 4%, having hit a three-month high of 4.26% on Wednesday.
US election and rate cut prospects add to market uncertainty
The upcoming US election is further fueling the market uncertainty, with former Republican President Donald Trump and Democratic Vice President Kamala Harris in a tight race for critical competitive states. The fading prospects for aggressive rate cuts are also driving the market selloff. Markets now price in a 95.1% chance of a 25-basis-point cut at the Fed's November meeting, down from at least a 25 basis point cut a month ago.
