Mon Oct 28 04:00:00 UTC 2024: ## Indian Equity Market Faces Downtrend Amidst FPI Selling and Geopolitical Uncertainty

**MUMBAI, INDIA** – The Indian equity market is experiencing a downward trend, driven by a confluence of factors, including record foreign portfolio investor (FPI) selling, tepid quarterly earnings, and regulatory changes, market experts predict.

The benchmark Nifty50 index has lost 6.3% this month, reaching 24,180.8. FPIs have offloaded ₹88,826.75 crore worth of cash shares in October, while domestic institutional investors (DIIs) have injected ₹97,090.83 crore. Despite DII buying, the downtrend is likely to continue until after the US presidential elections on November 5th, according to analysts.

“The selling intensity of FPIs, coupled with regulatory restrictions on stock margins for derivatives trades, is contributing to the market decline,” explained Nilesh Shah, MD of Kotak Mahindra AMC. He also cited Q2FY25 earnings disappointment, rising US bond yields, and the outcome of the US elections as factors driving the current market sentiment.

Several experts agree that rising US bond yields, fueled by a widening fiscal deficit, are prompting FPI outflows from emerging markets like India. G. Chokkalingam, founder of Equinomics, believes that the Indian stock market cap could erode by 5-10% further until the US election results are out.

Adding to the market volatility, the NSE has recently excluded 1,010 stocks from being used as collateral for margin trading, potentially causing selling pressure in these stocks, according to Mohit Mehra of Zerodha. However, he emphasized that stock conviction is the primary factor influencing investor decisions.

Chandan Taparia, senior vice-president of Motilal Oswal, anticipates the Nifty to fluctuate in the short-term range of 23,750-24,650.

**Overall, the Indian equity market faces a challenging period with continued FPI selling, geopolitical uncertainty, and regulatory changes impacting investor sentiment. While a short-term bounce is possible, experts expect the downtrend to persist until the US presidential election results are announced.**

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