For the stock market, the month of October has been the month with the biggest decline after the Corona period. However, apart from Muhurat trading, the month of November has also started with a big decline.

The market's decline has been so fast that the Sensex has seen a decline of more than 7700 points in just five weeks, or 25 trading sessions. The market witnessed panic selling pressure, and investors are in a hurry to sell.

Market data shows that after a bullish environment was created and reached a record high of 85,978 on 27 September, the Sensex has been falling for four consecutive weeks and the beginning of November has also not been encouraging.

The thing to be seen is that the stock market is under selling pressure on Monday before two important events, the US elections and the Fed meeting. When the Sensex fell by about 1,500 points, traders decided to avoid risk. Nifty fell by about 2% to the level of 23,800. This level of Nifty is the lowest level since August 6. 

FIs are selling

The continuous selling by FIIs is responsible for this situation. Santosh Meena, Research Head, Swastika IInvestment said, "Expectations of another stimulus package from China are boosting the outflow of funds from India to China, while FIIs are also booking profits ahead of the important upcoming US elections. Apart from this, DIIs appear to be isolated amid global events for the market."
 

Weak Earnings

Last month, the Nifty saw its biggest decline since the Covid crash of March 2020 amid a disappointing Q2 earnings season and the hhighest-evermonthly selling by FIIs (Rs 113,858 crore via exchanges).

The September quarter results season is turning out to be worse than expected as earnings estimates have been further revised down. Motilal Oswal believes that earnings of the 34 Nifty companies that have announced results so far have been flat on a year-on-year (YoY) basis against expectations of a 2% growth.

 

Rollover data weakened

In the October derivatives series, traders exercised caution while rolling over positions to the next series. Rollover for Nifty futures fell to 72.87%, down from 78.77% last month and below the three-month average of 76.38%.

FII positions show a long-short ratio of 22.27%, the lowest in recent months.

If no major trigger is generated, the stock market may go down further from the current level. The market may come under selling pressure in the month of November as well.