The Nifty 50 index experienced a dramatic decline in October 2024, plunging 6.22%—its worst monthly performance since March 2020, when the COVID-19 pandemic significantly impacted global markets. The index closed the month at 24,205.35, down 135.50 points or 0.56% on the final trading day. Several factors contributed to this downturn:
- Massive Selling by Foreign Institutional Investors (FIIs): FIIs recorded a net outflow of approximately ₹1.14 lakh crore, significantly overshadowing the ₹1.07 lakh crore in buying by domestic institutional investors (DIIs).
- Weak Corporate Earnings: The earnings reported for the second quarter of FY25 fell short of expectations, raising concerns about overall corporate profitability.
- Sluggish Economic Activity: There were indications of slower spending during the first half of FY25, which negatively affected investor sentiment.
- Market Correction: The decline also reflected a necessary correction in stock valuations that had become stretched.
Notable Stock Movements
Among the Nifty 50 scrips, IndusInd Bank suffered the most significant decline, plummeting 27% in the past month. Other notable decliners included:
- Bajaj Auto: -19.5%
- BPCL: -15.9%
- Nestle India: -15.4%
- Maruti Suzuki: -14.97%
- Hindustan Unilever: -13.6%
Stocks that Outperformed
Despite the overall market downturn, a few stocks managed to post gains:
- Wipro: +4.4%
- Tech Mahindra: +6.8%
- ICICI Bank: +3.08%
Market Outlook
Looking forward, analysts express caution regarding the market’s trajectory. Rupak De from LKP Securities highlighted that market sentiment is likely to remain weak as long as the Nifty stays below 24,500, with critical support levels around 24,000. Vinod Nair from Geojit Financial Services noted that while the technology sector faces challenges due to weaknesses in U.S. IT companies and disappointing domestic earnings, there could be a potential recovery in the latter half of the year if core sector data improves and government spending increases.
In summary, the Nifty 50’s significant decline in October underscores the ongoing challenges in the Indian stock market, with cautious investor sentiment prevailing amid economic uncertainties and volatility.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions. The performance of financial markets can be volatile and past performance is not indicative of future results.
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