New Delhi: The Sensex and Nifty have lost significant value in October 2024 as FIIs withdrew a whopping Rs 82,000 crore. Market liquidity was also impacted by the introduction of multiple initial public offerings (IPOs) as well as qualified investment placements (QIPs).
According to a report by Barron’s, October is historically known to be the cruellest month for stock markets with crashes witnessed in 1929, 1987, and 2008.
How the BSE Sensex performed in October 2024
In October 2024, the BSE Sensex declined by 5.66 per cent. This was a higher decline than the 4.58 per cent fall witnessed in June 2022. At the onset of the COVID-19 pandemic in 2020, the Sensex declined 6 per cent in February. This further declined by 23 per cent in March 2020. The BSE Sensex’ market capitalisation declined by Rs 29 lakh crore in October 2024, the ET reported.
US investment bank Goldman Sachs downgraded the rating of Indian stocks to neutral from overweight citing a potential slowdown in economic activity. The brokerage also revised its 12-month Nifty forecast to 27,000 from 27,500, the Mint reported.
Why are FIIs exiting Indian markets
FIIs have exited Indian markets in pursuit of profit. The current exit load marks a higher amount than what was seen in 2020. One of the reasons behind the FII exit is the recent fund infusion by the Chinese government which has made its stock market and real estate sector lucrative for investors. FIIs may have withdrawn money to reinvest in China.
How IPOs and QIPs hit market liquidity
Hyundai Motor India IPO, the country’s largest initial public offering, has led to a liquidity crunch in markets since institutional investors are required to park funds for a stipulated period.
Going for gold?
Investors are also likely eyeing gold investment since geopolitical tensions have risen to new highs. Tensions in the Middle East remain elevated with Israel, Iran, Lebanon and Palestine locked in a conflict.
The Sensex and Nifty have lost nearly 5 per cent value in the past month on the back of the withdrawal of Rs 82,000 crore funds by foreign institutional investors (FIIs) in the biggest lows since the COVID-19 induced crash. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
