Cyclical stocks have experienced a significant decline in performance during the Diwali season of 2024, which is in contrast to the strong returns observed in previous years.

Sectors such as automotive, construction, and consumer discretionary traditionally thrive during this festive period due to increased consumer spending and economic upswings.

However, this year has been challenging, with foreign institutional investors (FIIs) selling off nearly $11 billion in October, while domestic investors have continued to buy.

Experts believe that the FII selloff can be attributed to various factors, including muted Q2 performance, market overvaluation, and the availability of better investment opportunities in other markets.

The upcoming US presidential elections are also contributing to cautious sentiment among investors.

As the market navigates these turbulent conditions, the performance of cyclical stocks remains a key focus for analysts and investors.