Indian equity benchmarks tumbled on Monday, with both Sensex and Nifty falling more than 1 per cent as investors turned cautious ahead of the US presidential election and Federal Reserve’s policy decision later this week.

The BSE Sensex plunged 941.88 points or 1.18 per cent to close at 78,782.24, while the NSE Nifty declined 309.00 points or 1.27 per cent to end at 23,995.35. This marked the steepest single-day fall for Nifty since October 3, 2024.

Among Nifty constituents, Mahindra & Mahindra emerged as the top gainer, rising 2.14 per cent, followed by Tech Mahindra at 1.86 per cent, Cipla at 1.57 per cent, State Bank of India at 1.10 per cent, and Dr Reddy’s Laboratories at 0.82 per cent.

The major losers were led by Hero MotoCorp, which fell 4.25 per cent, followed by Grasim Industries dropping 3.96 per cent, Bajaj Auto declining 3.46 per cent, Adani Ports falling 3.26 per cent, and BPCL sliding 3.05 per cent.

Market breadth remained negative with 2,708 stocks declining against 1,356 advances on the BSE. Two hundred stocks hit their 52-week highs, while 32 touched their 52-week lows. The volatility index, India VIX, moved higher to the 17 level, indicating increased uncertainty.

Mahindra & Mahindra led the gainers among Sensex stocks, rising 2.00 per cent to ₹2,873.25, followed by Tech Mahindra (+1.94 per cent) and SBI (+1.07 per cent). HCL Tech and Infosys also posted modest gains of 0.29 per cent and 0.19 per cent, respectively. Among the losers, Adani Ports fell by 3.23 per cent, with Reliance down 2.77 per cent. Sun Pharma, NTPC, and Bajaj Finserv also declined by 2.68 per cent, 2.59 per cent, and 2.44 per cent, respectively.

“As expected, India is underperforming its global peers due to excess valuation. The ongoing selloff has deepened by weak Q2 earnings, dampening investor sentiment,” said Vinod Nair, Head of Research at Geojit Financial Services. He added that continued volatility is anticipated in the short term as attention shifts to the US presidential election and key policy decisions from the US Fed and Bank of England.

The market witnessed broader selling pressure across sectors, with realty, energy, and metal indices among the top losers. The Nifty Bank index fell 458.65 points or 0.89 per cent to close at 51,215.25, while Nifty Financial Services dropped 1.20 per cent.

Reliance Industries, a heavyweight, saw its shares drop 4 per cent to Rs 1,285.10, reaching a nine-month low, just a day after its bonus shares began trading.

“Markets witnessed broader sell-off as investors turned risk averse ahead of key US election outcome and Federal Reserve’s policy decision in the next few days time,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities. He noted that persistent foreign fund outflows and stretched valuations have created uncertainty among investors.

The Nifty has now dropped 2,460 points or 9.37 per cent from its lifetime high, indicating a significant correction. Technical analysts suggest the index might face further pressure in the near term.

According to Shrikant Chouhan, Head Equity Research, Kotak Securities, “the current market texture is weak but oversold hence strong possibility of one intraday pullback rally is not ruled out from the current levels.”

“The breakdown of Nifty’s recent consolidation range of 24,000–24,500, along with a noticeable increase in the volatility index, reflects growing pessimism among participants,” said Ajit Mishra, SVP Research at Religare Broking. He advised traders to adjust positions accordingly, prioritizing risk management amid expected volatility.

Foreign institutional investors (FIIs) have maintained their selling streak, with October witnessing substantial outflows of Rs 1.14 lakh crore, further pressuring market sentiment.

The market now awaits two crucial events this week - the US presidential election on November 5 and the Federal Reserve’s monetary policy announcement scheduled for November 7, which could potentially influence market direction in the coming sessions.

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