The Indian stock market took a significant hit on Monday, November 4, with widespread selling that impacted major indices. Both the Sensex and Nifty 50 plummeted over 1%, while mid-cap and small-cap stocks experienced losses of up to 2%.
The market capitalization of companies listed on the BSE declined sharply. From ₹448 lakh crore in the previous session, it fell to nearly ₹442 lakh crore, effectively causing a loss of around ₹6 lakh crore in one trading day.
Nifty Oil & Gas, Media, Consumer Durables, and Realty: Dropped by 2-3%.
Nifty Bank, Auto, FMCG, Metal, FMCG, and PSU Bank: Each of these sectors fell by around 1%.
Experts identified a few primary reasons behind Monday’s steep fall:
Investor caution ahead of the US presidential election is causing global market jitters. With opinion polls predicting a tight race between Kamala Harris and Donald Trump, market volatility is anticipated in the short term.
“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 the Fed action will influence the market trend,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Even after recent market corrections, valuations remain elevated, which some experts consider uncomfortable. According to Trendlyne, the Nifty 50’s current price-to-earnings (PE) ratio stands at 22.7, which is above its two-year average PE of 22.2 and close to its one-year average PE of 22.7.
Disclaimer: The views and recommendations provided are those of individual analysts, experts, and brokerage firms, and do not reflect the opinions of The Daily Guardian. Investors are encouraged to consult certified financial advisors before making any investment decisions.
