Sensex and Nifty plunge in early trade as Reliance Industries weighs down market

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The BSE Sensex and NSE Nifty experienced a sharp decline in early Monday trade, led by a significant drop in Reliance Industries shares and heightened caution among investors ahead of key US events, including the presidential elections and an expected decision on interest rates by the Federal Reserve. The downtrend was further fuelled by ongoing selling pressure from foreign institutional investors (FIIs), which has been consistent over recent weeks.

According to PTI, the BSE Sensex opened lower, falling by 665.27 points to reach 79,058.85. Simultaneously, the NSE Nifty also declined, shedding 229.4 points to settle at 24,074.95. In a significant downward movement, Reliance Industries, a key player in the market, along with other major stocks such as Sun Pharma, Infosys, Tata Motors, Titan, Maruti, and NTPC, emerged as prominent laggards within the 30-share Sensex pack.

According to PTI, foreign investor sentiment continues to remain cautious, with FIIs withdrawing equities worth Rs 211.93 crore on Friday alone, as per data from the exchanges. October saw foreign investors pulling a record Rs 94,000 crore (approximately USD 11.2 billion) from the Indian equity markets. This record outflow, the highest seen in a single month, has been largely attributed to the elevated valuations of Indian stocks, which contrast with more attractive valuations found in certain overseas markets, particularly Chinese equities.

Despite the downward trend in Indian markets, several Asian markets showed resilience, with indices in Seoul, Shanghai, and Hong Kong trading in positive territory. The US markets had also closed positively on Friday, providing some global support, although Indian markets were largely unmoved by these international cues.

Amidst this backdrop, crude oil prices added to the economic uncertainties facing Indian equities. The benchmark Brent crude climbed by 1.49 per cent to trade at USD 74.19 per barrel, putting further pressure on the domestic currency and raising concerns about India's inflation trajectory and the broader economic outlook.

On a positive note, the leading stock exchanges in India, the BSE and NSE, hosted a special ‘Muhurat Trading' session on November 1, in celebration of Diwali and marking the start of the new Samvat 2081. This one-hour session is a long-standing tradition aimed at ushering in prosperity and is typically met with enthusiasm from traders. During this session, the BSE Sensex rose by 335.06 points or 0.42 per cent, closing at 79,724.12, while the NSE Nifty gained 99 points, or 0.41 per cent, to close at 24,304.35, as per PTI.

However, the optimism seen during Muhurat trading was short-lived, as the start of regular trading on Monday revealed continued caution in the markets. While Mahindra & Mahindra, Tech Mahindra, HCL Technologies, and IndusInd Bank bucked the trend to trade higher, the broader market sentiment remained subdued.

According to PTI, investor outlook is being shaped not only by domestic factors but also by the anticipation of the Federal Reserve's rate decision, which could have far-reaching effects on global capital flows, potentially leading to further outflows from emerging markets like India.

(With inputs from PTI)