Sensex, Nifty: 5 reasons behind today's stock market fall; outlook, target level & more

Benchmark indices fell for the second straight session on Tuesday, as investors await the outcome of US elections and the US Fed policy review later this week amid a weak set of domestic quarterly results that are threatening sustenance of prevailing stock valuations. Add sharp foreign outflows and geopolitical concerns following Iran's ‘crushing response’ warning to Israel, the market is jittery and is waiting for the dust to settle. 

Elections in the US will be held on November 5 while the FOMC meet is scheduled for November 6-7 

With all the attention on the outcome of the US presidential election, perhaps the more important domestic economic issue is not getting the importance it deserves, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"It is important to understand that India’s underperformance is striking: while S&P 500 is up 20.45 per cent YTD, Nifty is up by only 10.36 per cent. Clearly, domestic issues are weighing on markets. With two thirds of Nifty companies missing their earnings estimates in Q2, Nifty earnings for FY25 has been drastically revised down to less than 10 per cent from the consensus 15 per cent earlier. With this kind of earnings downgrade it would be difficult to sustain the current valuation," he said.

Vijayakumar said this is also the rationale of the relentless FPI selling, which might continue for some more time.    

MOFSL said corporate earnings, after four consecutive years of healthy double-digit growth, are moderating due to pressures from commodities and fading tailwinds from BFSI asset quality improvements. The earnings revisions have turned adverse, with downgrades exceeding upgrades.

On Tuesday, the BSE Sensex was trading at 78,432.99, down 349.25 points, or 0.44 per cent. Nifty fell 89 points, or 0.37 per cent, to 23,906.35. fear gauge India VIX jumped 1.2 per cent to 16.89. 

Nomura India believes a Trump win is likely net-negative for Asia ex-Japan stocks, while it sees Harris as net-positive. In the betting markets, Trump has lost some earlier momentum, with Trump/Harris odds now almost neck-to-neck. 

"Our US economics team notes that US swing states will be the ones to watch on elections night (Wednesday morning Asia) where early swing state calls will likely signal the candidate with greater momentum, given that polling errors tend to be correlated across swing states. A unified government is the most likely scenario under a Trump victory, while a divided government would be likely under Harris," the foreign brokerage said.

As far as the US Fed policy review is concerned, Nomura expects FOMC to downshift to a 25 bps rate cut in November from the 50 bps cut in September. Meanwhile, amid the Iran-Israel tensios, OPEC-\+ has 

Nifty target level
Axis Securities said the Indian economy stands at the sweet spot of growth and remains the land of stability against the backdrop of a  volatile global economy.  It maintained its March 2025 Nifty target at 24,600 by valuing it at  20 times on March 2026 earnings. 

"While the medium to long-term outlook for the overall  market remains positive, we may see volatility in the short run with the market  responding in either direction. Keeping this in view, the current setup is a ‘Buy on 
Dips’ market. Hence, any market correction on account of global challenges will be  an opportunity to add to the equity investment," it said.