Indian equity market benchmark S&P BSE Sensex crashed a whopping 1,409 points – or 1.77 per cent – in early trading hours on Monday, apparently due to jitters over the too-close-to-call US presidential election and the forthcoming US Federal Reserve’s monetary policy meeting.
Concerns over tepid quarterly financial results by several companies also added to investor panic, leading to large-scale sell-off, traders said.
Nifty50, the other leading Indian stock market flagship index, also sank by 454 points, or 1.87 per cent, to 23,850 in the morning hour trading.
Weakness in the headline indices was intensified by selling across heavyweight names like Reliance Industries, Infosys, HDFC Bank, and ICICI Bank, all of which traded in the red.
The week kicked off on a weak note as investors eagerly await outcomes of some of the major events this week which are to influence the direction of the market globally, analysts said.
The major event on the radar this week is the US Presidential election on November 5, followed by the Fed’s monetary policy outcome on November 7.
While the US central bank is widely expected to deliver another rate cut – a quarter-percentage point this time around – the results of the US Presidential election have kept investors on edge, they said.
Touted as one of the most closely contested elections in US history, the outcome is expected to play a decisive role in shaping policies in the world’s largest economy and impacting global markets.
“A double dose of potentially market-moving events arrives in the coming week as Americans vote on their next president and the Federal Reserve offers more insight on the path of interest rates at its monetary policy meeting,” Moneycontrol quoted Deepak Jasani, Head of Retail Research at HDFC Securities, as saying.
Analysts said investors are also focused on China’s stimulus, details of which are likely to be announced on Friday after the five-day meeting of the standing committee of the National People’s Congress—China’s parliament—wraps up.
Caught between several uncertain but key triggers, investors took a cautious stance in the domestic market, awaiting further clarity.
The uneasiness in the market was also reflected in a more than 5 per cent spike in the ‘fear gauge’ India VIX, which hovered above the 16-point mark.
Meanwhile, oil prices rose nearly 2 per cent higher, gaining over $1 per barrel after OPEC+ stated it would delay a planned December output hike by one month due to soft demand and rising supply outside the group.
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