The selling spree continued in the Indian stock market on November 4, 2024, with the benchmarks indices – the Sensex and the Nifty 50 – crashing 1.51 per cent and 1.37 per cent, respectively.
The benchmark indices saw huge selling pressure in the morning trade on November 4, 2024. However, a respite ensued after 11.50 am. Here are the reasons behind the dip as well as the major gainers
The selling spree continued in the Indian stock market on November 4, 2024, with the benchmarks indices – the Sensex and the Nifty 50 – crashing 1.51 per cent and 1.37 per cent, respectively.
The Sensex opened at 79,713.14 against the previous close of 79,724.12 and crashed 1.67 per cent earlier in the day. The Nifty 50 opened at 24,315.75 against its previous close of 24,304.35 and fell 1.89 per cent. However after 11.50 am, the markets recovered marginally.
The BSE Midcap index dipped 0.99 per cent, and the small cap index dropped 2 per cent.
Current price-to-earnings (P-E) ratio for the Nifty 50 remains high at 22.7, above the historical average, and few market analysts have warned about a significant correction, as valuations also remain expensive.
While stock-specific corrections have occurred, overall, the market multiples are still elevated, according to market analysts.
Foreign portfolio investors are selling heavily, exacerbated by profit booking before the US Presidential Election. Investors are apprehensive about the increasing uncertainty regarding the outcome of the race between incumbent Vice-President Kamala Harris and former President Donald Trump, as the race is getting tighter each day.
Also, India Inc.’s results for the quarter ending September 2024, have disappointed the market. For instance, Bajaj Auto dipped 5 per cent today due to weak October sales dropping 8 per cent year-on-year (y-o-y).
Markets also got disappointed as current expectation of 25-basis-point (bps) rate cut by the US Federal Reserve is underwhelming, as it is already priced in. Also, higher expected fiscal spending promises from both the Presidential candidates have led to increased bond yields, negatively influencing the market sentiment.
Among the sectoral indices, Nifty Realty was the biggest loser, dropping 3 per cent. Nifty Oil & Gas and Media dropped 2.87 per cent and 2.70 per cent, respectively. Nifty PSU Bank, Auto, Metal fell between 1.67 per cent and 2 per cent.
Mahindra & Mahindra stood unharmed amid the massive sell-off in the market. The scrip gained 1.31 per cent today. CAMS and Cipla also showed resistance against the selling pressure, gaining 1.16 per cent and 1.44 per cent, respectively.
Bajaj Auto dipped 5 per cent today due to disappointing sales results in the month of October 2024. Reliance Industries was down 3.24 per cent, while Tata Motors fell 3.18 per cent. Infosys, ICICI Bank, HDFC Bank, and Sun Pharma (-3.61 per cent) were the other major laggards.