Sensex falls 836 points as markets start pricing in Trump’s victory effects on EM financial assets

Despite a strong overnight performance of the U.S. markets following Donald Trump’s victory in the U.S. Presidential election, Indian stock markets reported a bearish tone from the morning and continued with the sentiment throughout the day.

Key benchmark stock indices tumbled over 1% as the Indian markets started pricing in the effects of Mr. Trump regaining power after a gap of 4 years.

The S&P BSE Sensex fell 836.34 points, or 1.04%, to 79,541.79 points.

The Sensex stocks which lost the most included Tech Mahindra (2.5%), Tata Motors (2.36%), Sun Pharma (1.96%), IndusInd Bank (1.91%), Asian Paints (1.86%) and JSW Steel (1.86%).

The NSE Nifty-50 index too dropped 284.70 points, or 1.16%, to 24,199.35. 

 All major sectors aligned with the benchmark declined led by metals, pharma, and energy stocks. 

Deepak Jasani, Head of Retail Research at HDFC Securities said the markets snapped a two–day rally on Thursday after pricing in the effects of Mr. Trump’s winning the U.S. election on emerging markets’ (EM) financial assets, which ‘weighed on the risk-on sentiments.’

“The Indian Rupee continued to weaken even as the U.S. dollar gave up some gains made on the previous day. Broad market indices fell less than the Nifty suggesting pressure of institutional sales on largecaps,” he said.

“All cyclical sectors came under selling pressure and some more weakness could be in store in the near term. Global equites were mostly higher buoyed by a record rise for U.S. shares overnight, with the focus on policy decisions from the Federal Reserve and other major central banks, including the Bank of England (BoE), later in the day,” he said. 

“Asian equities, excluding China, witnessed sharp foreign outflows in October ($15.38 billion, the largest monthly net sales since June 2022), as investors wary of the U.S. Presidential election outcome reacted to concerns over weaker-than-expected corporate earnings, overvalued stocks and rising bond yields,” he added. 

Published - November 07, 2024 08:05 pm IST