Nifty Down 942 Pts on Monday’s Trading Session; Uncertain US Elections Spoils The Party

The uncertainty surrounding the US presidential elections has dampened the positive sentiments in the Dalal Street on Monday’s trading session. Sensex fell by 1,500 points in mid-session to close 942 points lower, at 78,782, a 3-month low. On the other hand, Nifty fell by 309 points at 23,995, its first close below the 24k mark in three months. The fall was majorly attributed to intensive selling activity by foreign investors who sold risky assets, which included Indian stocks.

The sell-off wiped out Rs 5.4 lakh crore with BSE’s market capitalisation at Rs 449.8 lakh crore.

Globally, fund managers are keeping a close eye on the outcomes of the US presidential elections. They believe that a Republican victory could cause volatility in the markets. In addition to this, economists are also worried about the state of the economy in the US as the country is going through a high level of deficit.

Anish Tawakley of ICICI Prudential Mutual Fund said, “Markets are worried about the US not bringing its fiscal deficit.” He added, “Consequently, US bond yields have been rising. This could put pressure on equity (markets) globally.” Notably, the US-10 year was hovering at 4.29%, a 4-month high.

Foreign Portfolio Investors (FPIs) pulled out nearly Rs 4,330 crore from the stock market, BSE data showed. Since October, FPIs have sold close to more than Rs 1 lakh crore. A combined data from NSDL and BSE showed that FPIs turned net sellers for 2024 since May.

In the coming weeks, elections in Maharashtra and Jharkhand will set tone for the domestic markets. Notably, the capital expenditure has considerably slowed down in the recent months, while rural consumption remains muted.

Vinit Sambre of DSP Mutual Fund said, “Urban consumption, which had previously remained resilient, is also showing signs of slowing, adding to the pressure, especially as lower to middle-income households have already been under stress.” He further added, “Heavy rains have been partly blamed for the slowdown, making it crucial to monitor the pace of recovery. If growth fails to pick up, it could pose further risks to both earnings and market performance.”

During Monday’s trading session, sectors including real estate, oil & gas and utilities lost their sheen, while IT remained resilient.

US election impact on stock market,Trump Harris election uncertainty,Sensex drop,Nifty closing below 24k,market capitalization decline