Monday brought disappointment among the investors. It was a day of losses in the Indian stock market. It Witnessed across-the-board sell-offs, The benchmark indices, Sensex and Nifty 50, both fell by over 1%, while the mid-and small-cap segments saw a decline of up to 2%.

On Monday the Sensex opened at 79,713.14, just slightly lower than its previous closing number, which was 79,724.12 on Friday. The Sensex soon dropped by nearly 2%, reaching 78,232.60. On the other hand, the Nifty 50 started the day at 24,315.75, compared to its previous close of 24,304.35, and fell 2% to 23,816.15.

Investors and traders watched the market fall and hit a new low in the last three months. By the end of the day, the Sensex closed 942 points, or 1.18%, lower at 78,782.24. The Nifty 50 also ended in the red, dropping 309 points, or 1.27%, to close at 23,995.35.

Both the BSE Midcap and Smallcap indices saw losses as well, falling by 1.31% and 1.65%, respectively.

Rs 6 Lakh Crore Wiped Out From Indian Market

After the market crashed on Monday, the market capitalisation of BSE-listed firms drastically declined by Rs 442 lakh crore, down from Rs 448 lakh crore in the previous session. This blew up the entire system and wiped out Rs 6 lakh crores from the Indian stock market at the end of the day. This crash has caused a major loss to investors, making them poorer by about Rs 6 lakh crore in a single session.

As many as 42 stocks ended with losses in the Nifty 50 index. Among the top losers were the shares of Hero MotoCorp, Grasim, Bajaj Auto, Adani Ports and Special Economic Zone, and BPCL as the top losers, falling 3-4%.

Despite the market being in the red and crashing, Mahindra and Mahindra, Tech Mahindra, Cipla, and SBI ended as the top gainers in the index, rising 1-2%.

Key Factors Behind The Fall of The Indian Stock Market on Monday

After the market went down, experts have pointed out a few major factors-

US Election’s Effect-

The stock market is already very volatile around the world due to various geopolitical reasons. One reason for Monday’s market crash was how it was reacting to US election-related anticipations. While elections are being held today, there is uncertainty about the outcome. Poll predictions from around the world show a neck-and-neck, tight competition between the two candidates, democratic Kamala Harris and Republican Donald Trump.

“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.

The US Fed Effects–

As the policy meeting for the US Federal Reserve is scheduled for November 7, it is creating some ups and downs in the stock market. Analysts expect potential changes, such as cutting interest rates by a quarter of a percentage point, This could drive forgein investment inflow in the nation. Until there’s more clarity on the Fed’s decision, investors are playing cautious while dipping hands in the market, which eventully resulted in market decline on Monday.

Unexpected Q2 Earnings Brings Disappointment–

With the release of Q2 earnings, the sentiment of investors indicates a slight disappointment with Indian corporates. This disappointment has caused investors to pull out money, contributing to a decline in the equity market and prompting FIIs to offload Indian stocks.

Rise In Oil Prices

Oil prices plunged over 2% on Monday. This came after OPEC+ decided to delay its plans to increase output by a month. Brent futures climbed 2.5%, to $74.91 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 2.7%, reaching $71.35.

OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia, and other allies, made an announcement on Sunday, saying it would extend its 2.2 million barrels per day output cut for another month in December. This decision was driven by factors such as weak demand and falling prices.
when the market opened on Monday, this factor effected the market index strongly.

The move comes as the market braces for a crucial week, including the U.S. presidential election.

Selloff By FPIs

At present, the Indian stock market is experiencing heavy sell-off pressure from foreign portfolio investors (FPIs). This has created a flash warning for domestic institutional investors (DIIs) as well. The increased withdrawal by FPIs has had a major effect on the Indian Stock market. At the end of the day, FPIs withdrawal were also a major reason of market decline.