Heavy selling continues in Indian equity indices Sensex and Nifty. When the market opened in the morning, Nifty-50 fell 2 percent or 488.2 points from the previous close and reached an intraday low of 23,948.95. Nifty last slipped below the level of 24,000 on August 6, 2024. Like Nifty 50, BSE Sensex fell by 1,491.52 points or 1.87 percent to 78,232.6. Due to this terrible fall, Rs 8 lakh crore was wiped out from the market in one go.
When there was a boom in the market in Muhurta trading, investors had earned Rs 4 lakh crore. Then some experts were speculating that now the market might be back on track, but when the market opened today, all the projections proved to be bleak in front of the fall of Sensex and Nifty. Now the question arising here is whether the selling in the market will continue in November like the month of October? Will small retail investors not get to make some money in November also? For this, let me first explain to you the mood of the market.
How is the mood of the market right now?
To understand the mood of the market, one has to look at India VIX, which is called India Volatility Index, which measures the expected volatility of Nifty 50. Around 11 am it had increased by 10 percent. The faster it goes. Understand, the more fear is increasing in the market. This shows that people’s confidence in the market has decreased compared to before. People are scared of the ongoing selloff in the market and it is likely to continue further. Now the question here is why this possibility exists?
Ongoing concerns regarding US elections
As the US heads to the polls to elect its next President on November 5, markets around the world are feeling the effects of the tight race between former President and Republican nominee Donald Trump and current Vice President and Democratic contender Kamala Harris.
According to reports, in a new survey conducted in Iowa, US Democratic presidential candidate Kamala Harris has left Republican Donald Trump behind. Independent market analyst Ambrish Baliga said that Kamala Harris’s victory is not good news for India. Phillip Capital recently said in a note that a Harris victory would imply a neutral/average continuation for the economy, equities and other asset classes. If Trump wins, there will be more impact on the equity market.
What are the figures telling?
Data shows that under Trump 1.0, Sensex and Nifty have increased by 82.3 per cent and 73.6 per cent respectively, compared to 59 per cent and 64.5 per cent under the Biden administration. After US job growth almost came to a standstill in October, the US Federal Reserve’s policy meeting to be held from November 6 to 7 is also raising concerns. According to the report, non-farm payrolls increased by 12,000 jobs in October, the smallest increase since December 2020. The economy created 112,000 fewer jobs in August and September than previously reported.
Bad results came in the second quarter
Earnings of 34 Nifty 50 companies that reported results by October were flat year-on-year compared to an estimated positive growth rate of 2 per cent last year, according to a post-release analysis of companies by brokerage firm Motilal Oswal Financial Services. It is visible. Deepak Jasani, Senior Vice President and Head Research, Retail Segment, HDFC Securities Limited, says that the earnings have come down, which is a bit disappointing, which is discouraging investors from buying on dips.
To explain it in simple language, the reduction in profit is preventing investors from buying due to fall in any stock. Usually, when the stock comes down, investors sit with positions, so that when there is recovery, they can make profit. Right now this is not being seen in most of the cases.
FII sales increased tension
Continued selling by foreign institutional investors (FIIs) has also influenced the market sentiment for October and this trend is likely to continue in November as well. According to NSDL data, FIIs sold Rs 94,017 crore in Indian equities in the month of October. On Friday, November 1, FIIs had sold equities worth Rs 211.93 crore.
Bad auto sales data
Wholesale sales data for the month of October also weighed on the markets, as concerns of inventory build-up at dealers and decline in retail sales during the ongoing festive season hit the performance of auto makers. The passenger vehicle sector recorded a marginal growth of 1.8 per cent over the previous year, totaling 401,447 units in October.
According to Baliga, auto sales figures in October were not very good. At last count, Nifty Auto fell 2.28 percent to 23,263.75. Of the 15 stocks included in the index, 14 declined and only 1 registered a rise. Hero MotoCorp, Bajaj Auto, TVS Motor, Tata Motors and Eicher Motors recorded declines ranging from 5.53 percent to 3.04 percent.
What should small investors do in such a situation?
Now the biggest question arising here is that what should small retail investors do in this situation of ongoing confusion in the market? In response to this question, stock market expert Harsh Rungta says that small investors should wait for the US election voting this week. So that it can be clear which direction the market will take.
He believes that the results of the US elections will affect the markets around the world including India. He says that the market shows a more positive attitude during Trump’s tenure. That is, at this time, instead of investing money in the market, investors should carefully observe the trend of the market, and think about investing when the market starts showing its movements clearly in the next week.
