The stock market had a challenging day on Monday with major stock indices like the S&B and BSE Sensex falling sharply over 1,000 points. This fall was caused by several factors, including foreign investors pulling out their money, the weak performance of Indian companies, and global economic uncertainty. These all factors led to a significant loss in value for many stocks, especially smaller companies.

In early trading, the Sensex was down 1,045 points, sitting at 78,678.96, while the NSE Nifty50 fell 342.35 points to 23,962. This drop also affected smaller companies, leading to significant losses in both smallcap and midcap stocks as investor worries grew.

The sell-off comes after data showed that foreign portfolio investors (FPIs) sold a record ₹1,13,858 crore in equities in October, signifying the largest monthly outflow ever. Analysts believe this fleeing is due to high stock valuations and a weaker outlook for domestic earnings. As a result, the markets have declined nearly 8% from recent highs, further impacted by disappointing Q2 earnings from Nifty-listed companies.

Many big companies like BPCL, IndusInd Bank, UltraTech Cement, and Coal India have had their earnings predicted lowered. Many companies in the Nifty 50 index saw only a small increase in sales in the last quarter, and their profits remained unchanged. This shows that the Indian economy is facing tough times.

Global events like the US presidential election also added to market volatility and affected investor sentiment. Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said that the upcoming US presidential election is a key factor contributing to the turbulence.

He said, "In the next couple of days, markets globally will be focused on the U.S. presidential elections, and there can be near-term volatility in response to the election outcome."

However, the long-term direction of the markets will depend on factors like the US economy, inflation, and the decisions made by the Federal Reserve.

Rising oil prices, due to geopolitical tensions in the Middle East, are also adding to the market's woes. This could lead to higher inflation and impact Indian companies' earnings. Besides this, the weakening rupee against the dollar is adding to the inflationary pressure.

From a future perspective, analysts recommend focusing on large-cap stocks with fair valuations to navigate this volatile environment. Dr. Vijayakumar emphasises that staying invested in fairly valued large-cap stocks is a safer strategy amid these challenges. While short-term turbulence is expected, the long-term outlook will depend on domestic policies and global trends shaping the Indian economy.