The Indian stock market experienced a significant downturn on Thursday, November 7, 2024. The Sensex shed 836 points, or 1.04 per cent, to close at 79,541.79. This substantial drop came ahead of a key meeting of the US Federal Reserve, causing investors to brace for potential impacts on the global economy.

The Nifty also experienced a significant drop, falling 284.70 points, or 1.16 per cent, to close at 24,199.35. The Nifty Bank fell 400.90 points, or 0.77 per cent, to 51,916.50. The Nifty Midcap 100 index closed at 57,916.50 after falling 246.65 points or 0.43 per cent, while the Nifty Smallcap 100 index closed at 18,763.85 after falling 142.25 points or 0.75 per cent.

The market downturn was widespread, with heavy selling observed across all sectors except for PSU banks. The metal sector of Nifty saw a particularly large amount of selling. Other sectors, including auto, pharma, realty, energy, and infra, fell by more than 1 per cent.

Sector-Wide Downturn

The IT, financial services, FMCG, media, private banks, commodities, PSE, and healthcare sectors also ended the trading day in the red. Among the top losers in the Sensex pack were Tech Mahindra, Tata Motors, Ultra Tech Cement, JSW Steel, Sun Pharma, Asian Paints, IndusInd Bank, Titan, Tata Steel, ICICI Bank, and Power Grid. SBI, however, managed to make it onto the list of top gainers, demonstrating some resilience amidst the widespread market downturn.

The market trend remained negative throughout the trading day. On the Bombay Stock Exchange (BSE), 1,825 stocks were trading in the green, while 2,129 were in the red. There was no change in 99 shares.

Market experts have attributed the deep cut in the domestic market to disappointing Q2 results and persistent selling by Foreign Institutional Investors (FIIs). These factors have continued to dampen market sentiment.

Investor Focus Shifts to Federal Reserve Meeting

However, investors are now shifting their attention to the upcoming Federal Reserve policy meeting and domestic public outlay, which are anticipated to offer more insight into the future trade path. The rupee also traded weak at 84.36, registering a decline of 0.04. The dollar index remained stable near 104.50, maintaining its strength as investors positioned themselves ahead of the key Federal Reserve meeting.

This market downturn is reminiscent of similar events in the past where anticipation of key economic events has led to significant market volatility. For instance, in 2013, the mere hint of the US Federal Reserve tapering its bond purchases led to the 'Taper Tantrum,' causing significant volatility in global financial markets.

In conclusion, the Indian stock market experienced a significant downturn on November 7, 2024, with the Sensex shedding 836 points. This drop came ahead of a key meeting of the US Federal Reserve, causing investors to brace for potential impacts on the global economy. The market downturn was widespread, with heavy selling observed across all sectors except for PSU banks. However, investors are now shifting their attention to the upcoming Federal Reserve policy meeting and domestic public outlay, which are anticipated to offer more insight into the future trade path. This event underscores the interconnectedness of global financial markets and the potential for significant market volatility in anticipation of key economic events.