October 2024 Stock Market Crash: Rs 20 Lakh Crore Gone in a Week!
Markets ended lower for the fourth consecutive week, marking their longest losing streak since August 2023. Here's our take on this week gone by, some stories you might have missed out on, and our thoughts on what to do going ahead, in your weekly stock market report.
Weekly Recap
Happy Diwali?
- The Diwali season kicked off on a rocky path, with Nifty plunging 2.7% last week, wiping out nearly Rs 20 lakh crore in investor wealth as 46 of 50 stocks declined.
- The Sensex followed suit, with mid-cap and small-cap indices seeing their biggest weekly drop since December 2022.
- Market anxiety was evident, as India VIX (the volatility index) spiked by more than 9%, signalling heightened caution among investors.
Why so miserable?
- Foreign investors have been dumping Indian stocks like never before, shifting toward Chinese equities after the Chinese government’s big stimulus announcements.
- Add to this the uncertainty of the upcoming U.S. election, lackluster Q2 earnings for India Inc, and ongoing geopolitical tensions—it’s no wonder indices really had nowhere to go but down.
The (few) winners
- HDFC Bank was a rare bright spot last week, making a 3.7% gain on its steady growth for the quarter and the green light for an IPO from its NBFC subsidiary, HDB Financial.
- Tech Mahindra also fared well, gaining 1.7% thanks to strong net profit growth and making headlines for adding the most employees among the top five IT giants.
The losers
- IndusInd Bank sank like a rock on Friday, by an astonishing 22.7%, upon a dismal Q2 show - the bank reported a staggering 40% decline in net profit for the quarter.
- Tata Consumer Products faced similar headwinds, plummeting 11% last week as its key Indian beverage segments reported a 3% revenue decline and a 4% volume drop.
Meanwhile…
- Gold prices marked their third consecutive weekly rise, reaching record levels amid concerns over the tight race for the White House and geopolitical tensions in the Middle East. Explore the other factors behind this soaring gold rally in our latest analysis here.
- Data showed that India's economic activity, including both manufacturing and services, saw an uptick in October compared to September, fuelled by favourable demand trends. The HSBC Flash India PMI, as reported by S&P Global, edged up to 58.6 in October from 58.3, signalling continued expansion.
Market Brief
Market Outlook
Our take
- As global attention shifts to a potential second Trump administration, we anticipate that investors may adopt a cautious stance, keeping the Nifty rangebound between 23,800 and 24,600 levels.
- Investors will be closely watching upcoming earnings reports and key U.S. economic figures like GDP and payroll, which will likely shape market trends.
- Despite current uncertainties, the long-term outlook for the Indian market remains robust—according to recent IMF forecasts, India is poised to become the world's fourth largest economy by 2026-27 and the third largest by 2028-29.
- So, what should investors do in these conditions? This blog provides insights, illustrating how these markets can actually be a gift in disguise for those who play the long game.
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