Stocks turn jittery on Monday morning amid uncertainty over the US elections, as the Republican Donald Trump was neck-to-neck with Democrat Kamala Harris in the presidential race. A drop in FY25 earnings estimates for India Inc, strong foreign outflows, a record low rupee and a rise in oil prices due to delays in OPEC+ output hike due to geopolitical tensions triggered selling pressure in domestic stocks.
The BSE Sensex fell 869.16 points, or 1.09 per cent, to trade at 78,854.96. The NSE Nifty traded at 24,036.90, down 267.45 points or 1.1 per cent. Reliance Industries Ltd, ICICI Bank Ltd and Infosys Ltd contributed most to the index fall.
“The Indian market is facing headwinds from decelerating earnings growth. Nifty’s FY25 EPS growth as indicated by Q2 results may dip below 10 per cent in FY25, which will render the present valuations of about 24 times estimated FY25 earnings, difficult to sustain. FIIs may continue to sell in this difficult earnings growth environment, constraining any rally in the market,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Remaining invested in fairly valued largecaps is the safe option for investors in this tough situation,” Vijayakumar said.
Data showed FPI sold Rs 1,13,858 crores worth equities in October, which is the single highest absolute selling ever in a month by FPIs. This relentless selling contributed hugely to the about 8 per cent decline in benchmark indices from the peak. Earnings disappointment has a role in the trend.