Nifty 50 plummets 3.7% in October so far, biggest monthly drop since September 2022
Adani Enterprises (down 3.2%), Tech Mahindra (down 2.8%), Mahindra & Mahindra (down 2.6%), Bajaj Finserv (down 2.5%), Hindalco Industries (down 2.1%), Bajaj Finance (down 1.9%), LTIMindtree (down 1.7%), and Eicher Motors (down 1.7%) were the top losers in the pack. On the flip side, Axis Bank and HCL Technologies are trading in the green with a marginal gain of 0.8% and 0.1%, respectively. Among sectoral indices, Nifty Realty was the biggest laggard in today's trade, dropping as much as 3.17%, followed by Nifty Media (down 2.6%), and Nifty PSU Bank (down 2.31%).
Even though China announced a one trillion-yuan stimulus to address its struggling economy and there was a significant drop in crude oil prices from $97 a barrel to $89 a barrel, alongside decent performances by Indian private sector banks in Q2 FY24, investors have not embraced these positive indicators. Instead, they are being overshadowed by geopolitical tensions and rising bond yields in the United States. Dr.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "There is risk-off in global equity markets triggered by a combination of economics and geopolitics. The Israel-Hamas conflict continues to be a major headwind for markets. If the conflict lingers for long it has the potential to impact global growth, too, when the global economy is already in the midst of a slowdown." "In the near term, however, the strongest headwind for the market is the stubbornly high US bond yields.
With the 10-year bond yield at near 5%, FPIs are likely to be in the sell mode. Sectors like banking and IT, which constitute the largest segments of the AUM of FPIs, are likely to be under pressure. This will provide opportunities for long-term investors
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