Overvalued F&O Stocks Under Pressure as Nifty Sinks 5%

Nifty Crashes 5% — First Time Since the Covid Crash

Markets opened deep in the red today, with the Nifty 50 falling nearly 5% at the open — something we haven’t seen since the Covid-driven crash in 2020. The sharp decline came as global investors reacted nervously to fresh tariff announcements and rising trade war fears.

With panic spreading fast, investors began pulling out riskier bets, leading to a broader market sell-off.

What’s Happening With F&O Stocks?

Amid all the market noise, one group of stocks is catching attention: overvalued F&O stocks. Despite already seeing sharp corrections — many are down more than 40% from their all-time highs — these stocks are still trading at high valuations.

In simple terms, they’ve fallen a lot, but they’re still expensive.

Here’s Why That’s a Concern

Many of these stocks continue to trade at:

• Price-to-earnings (P/E) ratios above 40
• Market Cap to Sales multiple well above 4

This combination of big price drops and high valuations could be a warning sign. If overall market weakness continues, these names could remain under pressure or fall further.

Key Overvalued F&O Stocks to Watch

Here’s a quick look at some of the most overvalued stocks in the F&O segment based on current market data:

What This Means for Traders

Even after falling significantly, these stocks remain expensive, which could spell trouble if the broader market correction continues. For traders watching the F&O space, these names might be worth keeping on the radar for potential short-side setups, mainly if volatility stays elevated.

In Summary

• Nifty’s 5% drop today has sent shockwaves through the market.
• Several F&O stocks are still trading at high valuations despite steep price corrections.
• If macro uncertainty continues, these stocks may stay under pressure.