In the first trading session of the week, benchmark equity indices BSE Sensex and NSE Nifty 50 closed in the negative territory, each declining over one per cent. The BSE Sensex dropped 941.88 points, or 1.18 per cent, settling at 78,782.24, while the NSE Nifty 50 fell by 309 points, or 1.27 per cent, ending at 23,995.35.

The market's downturn was dominated by bearish sentiment, with 42 of the 50 Nifty 50 stocks closing in the red. Notable losers included Hero MotoCorp, Grasim Industries, Bajaj Auto, Adani Ports, and BPCL, with losses reaching as high as 4.25 per cent. Conversely, a handful of stocks, including Mahindra & Mahindra, Tech Mahindra, Cipla, State Bank of India, and Dr. Reddy's Labs, managed to end the session in positive territory, with gains of up to 2.14 per cent.

The India VIX, which gauges market volatility, rose by 5.01 per cent to 16.70 points, reflecting heightened investor anxiety. Broader market indices also experienced declines, with the Nifty Midcap 100 and Nifty Smallcap 100 falling by 1.31 per cent and 1.98 per cent, respectively. All sectoral indices ended lower, with Nifty OMCs, Realty, and Media sectors dropping by over two per cent, while Financials, FMCG, Metals, Private Banks, and Consumer Durables fell by more than one per cent.

According to Vishnu Kant Upadhyay, AVP of Research and Advisory at Master Capital Services Ltd, Dalal Street's steep decline is evident as both Nifty 50 and Sensex have dropped nearly two per cent at the week's outset. The Nifty index is down approximately 9.5 per cent from its all-time highs, marking a five-month low, largely due to significant sell-offs by foreign institutional investors (FIIs), who have offloaded around Rs 114.445 crore in the cash segment. Investor sentiment has been further strained by disappointing quarterly earnings and ongoing geopolitical uncertainties.

With Indian markets trading at elevated valuations, these challenges have acted as catalysts for the current correction. The day’s sell-off was influenced by several factors, including the upcoming US presidential election on November 5, the Federal Reserve’s monetary policy announcement on November 7, and recent underwhelming US nonfarm payroll data. Concerns regarding a potential delay in the US election results have added to investor anxiety.

Technically, the market remains below its 100-day exponential moving average (EMA), reinforcing a bearish outlook. This week is deemed crucial, as holding above 23,500 could indicate bargain buying opportunities, while sustained movement above 24,500 may trigger short covering, signalling a potential end to the downtrend. Conversely, a decisive break below the 23,500–23,400 range could lead to further declines toward 22,800.

Vinod Nair, Head of Research at Geojit Financial Services, commented, “As expected, India is underperforming its global peers due to excess valuation.” He noted that the ongoing sell-off has intensified following weak Q2 earnings, dampening investor sentiment. Nair anticipates continued volatility in the short term, particularly as attention shifts to the closely contested US presidential election and key economic events such as policy decisions by the US Federal Reserve and the Bank of England.