Market Bears Tighten Grip as Nifty 50 Suffers Steepest Monthly Fall

Market Bears Tighten Grip as Nifty 50 Suffers Steepest Monthly Fall

VoM News Desk | October 26, 2023 | 12:00 PM IST | Breaking News | Follow on Google News

Market Bears Tighten Grip as Nifty 50 Suffers Steepest Monthly Fall

October’s Bearish Run: Market Bears Tighten Grip as Nifty 50 Suffers Steepest Monthly Fall

The bears have seized control of the Indian stock markets, driving the benchmark indices into a steep decline over the past three trading sessions. The Nifty 50 has extended its losing streak for the sixth consecutive session, breaking the critical 19,000 mark for the first time since June 28, 2023. This October, the index has seen a substantial 3.70% decrease in its value, marking the most extensive monthly drop since September 2022, when it plummeted by 3.74%.

From All-Time High to a Six-Month Low

The Nifty 50 initiated its descent on October 17, starting at around 19,811 points and falling significantly to its current level of 18,908, representing a loss of 1,314 points or 4.22%. The index has now fallen by 6.4% from its all-time high of 20,222. On Thursday, the index began the trading session with a sharp gap down at 19,027, compared to the previous closing price of 19,122. During early trading, it hit a four-month low of 18,884, a 1.12% decline.

Largest Monthly Drops in the Past Two Years

For reference, here are the largest monthly drops for the Nifty 50 over the last two years:

June 2022: 4.85% November 2021: 3.90% September 2022: 3.74% October 2023 (so far): 3.70% December 2022: 3.48% February 2022: 3.15% May 2023: 2.53% August 2023: 2.53% January 2023: 2.45% April 2022: 2.07% February 2023: 2.03%

Source: Tradingview

Global Factors Fueling the Decline

The Indian market’s decline mirrors a similar drop in Asian markets, which followed a dramatic fall in US tech stocks due to disappointing earnings reports and surging Treasury yields. The 10-year US Treasury note rose above 4.9% for the second consecutive trading day on Thursday, according to Trading Economics data.

Among the components of the Nifty 50, Adani Enterprises, Tech Mahindra, Mahindra & Mahindra, Bajaj Finserv, Hindalco Industries, Bajaj Finance, LTIMindtree, and Eicher Motors were the top losers. Axis Bank and HCL Technologies, however, managed to stay in the green.

Sectoral Declines

Nifty Realty was the biggest laggard, falling by 3.17%, followed by Nifty Media (down 2.6%) and Nifty PSU Bank (down 2.31%).

Challenges and Opportunities

Despite positive indicators like China’s one trillion-yuan stimulus and declining crude oil prices, geopolitical tensions and rising US bond yields continue to overshadow market sentiment. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlights the risks posed by the Israel-Hamas conflict and high US bond yields. He suggests that long-term investors may find attractive opportunities to purchase quality stocks, particularly in the banking sector.

Disclaimer: The opinions and suggestions provided in this article are those of individual analysts and do not reflect the viewpoints of VoM News. We encourage investors to consult with certified experts before making any investment choices.

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