Udaipur, November 4, 2024 – The Indian stock market crashed in early trade today with uncertainty looming large over investors ahead of the US election and the Fed rate decision. Traders were adopting a risk-off approach on the first day of trade after Diwali with the benchmark indices resuming a downward trend following a week of consolidation. The Sensex opened at 79,713.14 against a previous close of 79,724.12. The Nifty 50 opened at 24,315.75 against its previous close of 24,304.35.

At around 2:00 pm, Sensex was 78548.53, down 1175.59 points while Nifty was down 383 points at 23921.35

Factors driving the markets today:

US Election

The market was reacting nervously to the prediction of a tight fight between Democrat Kamala Harris and Republican Donald Trump as the US goes to polls tomorrow, November 5. Analysts say that the next two days will be volatile for the markets as all eyes will be on the elections. However, this phase could be temporary because of economic fundamentals such as inflation, Fed rate decision and US growth, believe experts.

Federal Rate Factor

On November 7, the US Federal Reserve policy is anticipated to come out with a 25-basis point rate cut. Some analysts believe this may not impact the Indian market in a major way as this rate cut was already priced in.

FIIs Sell-Off

Foreign Institutional Investors (FIIs) were selling off in a big way owing to the global factors. This was impacting the Domestic Institutional Investors (DIIs) also, say market experts. News from China indicate that another stimulus package is expected in the country. This was also leading to an outflow of funds from India to China.

October was the worst month for outflows, with FIIs selling off stocks valued at over Rs 90,000 crore. According to exchange data, foreign investors sold stocks on November 1 for Rs 211.93 crore. However, DIIs softened the blow by purchasing Rs 1.07 lakh crore.

With inputs from media sources