Sensex, Nifty tumble ahead of US elections; Hero MotoCorp falls 4%

The NSE Nifty 50 dropped by 321.20 points to settle at 23,983.15, while the BSE Sensex fell 941.88 points to 78,782.24. Most of the broader market indices also declined sharply during the session.

In Short

• Sensex, Nifty face steepest drop in over a month
• Nifty falls 321.20 points; Sensex down 941.88 points
• Record foreign fund outflows intensify market uncertainty and caution

Benchmark stock market indices suffered their steepest fall in over a month on Monday as investors exercised caution ahead of the US presidential election and awaited upcoming economic decisions from global central banks.

With the US election adding to market jitters and the Indian benchmarks under pressure, volatility surged to its highest in three months.

The NSE Nifty 50 dropped by 321.20 points to settle at 23,983.15, while the BSE Sensex fell 941.88 points to 78,782.24. Most of the broader market indices also declined sharply during the session.

All 13 major sectoral indices finishing in the red. Small-cap and mid-cap indices, which are more closely tied to domestic sentiment, dropped 2% and 1.3%, respectively. Meanwhile, the Nifty volatility index surged to 16.69, its highest level since early August, underscoring the market's apprehension.

Among the major decliners in the Nifty 50 were Hero MotoCorp, Bajaj Auto, Adani Ports, Grasim, BPCL and Reliance Industries.

Bajaj Auto and Hero MotoCorp also posted losses of 3.6% and 4.3%, respectively, following weaker-than-expected domestic sales figures and a flagged decline in market share by CLSA.

Vinod Nair, Head of Research at Geojit Financial Services, observed that Indian markets are struggling to keep up with global peers due to high valuations.

"The ongoing sell-off has been exacerbated by weak Q2 earnings, which has dampened investor sentiment. Continued volatility is anticipated in the short term as attention shifts to the U.S. presidential election and upcoming central bank policy decisions," Nair said.

Persistent foreign fund outflows have also stoked investor caution, contributing to the steep corrections seen in recent sessions. In October alone, foreign investors withdrew a record Rs 1.14 lakh crore from Indian markets. This wave of outflows has heightened concerns over stretched valuations, with many investors opting to lock in profits amid ongoing uncertainty.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted, "Markets witnessed a broader sell-off as investors turned risk-averse ahead of the US election and Federal Reserve policy decision in the coming days.”

“Stretched valuation concerns have been weighing on sentiment for some time, while persistent foreign fund outflows and underwhelming corporate earnings have added to the uncertainty,” he added.