Benchmark stock indices fell sharply during Monday’s trading session, with the S&P BSE Sensex and the NSE Nifty50 both down as much as 2% in early trade. decline wiped out substantial amounts of investors’ wealthcausing widespread panic on Dalal Street.

As of 1:24 PM, the Sensex was down 1,310.69 points to trade at 78,413.43, while the Nifty50 was down over 400 points. The sharp drop was reflected by substantial losses in major stocks including Reliance Industries Limited (RIL), Bajaj Auto, Adani Ports, Hero MotoCorp, ONGC and Tata Motors.

Shares of RIL fell 3.54% to trade at Rs 1,291.20, largely due to profit booking by investors. Hero MotoCorp witnessed the most significant decline, down 5.4%, followed by Bajaj Auto, which fell 4.66%. Other notable losers included ONGC, down over 4%, and Adani Ports, down 3.83%.

The the Dalal Street bloodbath can be attributed to a combination of factorsincluding a disappointing earnings season in Q2, heightened caution ahead of the upcoming US presidential election and persistent selling by foreign institutional investors (FIIs).

The impact of weak earnings was pronounced, with major companies facing significant downgrades to their earnings forecasts, contributing to negative sentiment among investors. For example, BPCL reported a staggering 34.3% cut in its FY25 guidance after Q2 results. This trend has left investors questioning the sustainability of current valuations, especially as the Nifty’s FY25 EPS growth is expected to fall below 10%.

“Given the prevailing conditions, FPIs may continue selling in this challenging earnings environment, limiting the potential for market recovery,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Additionally, as IIFs refocus their investments, the expectation of a stimulus package from China has further exacerbated capital outflows from India. Domestic institutional investors (DIIs), meanwhile, remain cautious and have pulled out of the market, contributing to the prevailing bearish momentum.

With both the Nifty and Sensex nearing their critical 200-DMA levels – around 23,500 and 77,000 respectively – analysts suggest that these points could serve as temporary limits if selling pressure eases.

However, the current environment calls for investors to remain vigilant and focus on stocks with reasonable valuations and strong earnings momentum as they navigate this turbulent phase of the market.

(Disclaimer: The views, opinions, recommendations and suggestions expressed by experts/experts in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any investment or investment options. trading.)