Stock Market Crash: Indian Markets Decline for Fifth Consecutive Session on November 13 Amid Weak Global Trends and Investor Sell-off

Indian stock markets witnessed their fifth consecutive day of losses on Wednesday, November 13, driven by a mix of weak global trends, a rising US dollar, a weakening rupee, and continued foreign investor selling. The Sensex plunged by 1,015.53 points, or 1.3%, to an intra-day low of 77,659.65, while the Nifty 50 dropped 338 points, or 1.4%, to a low of 23,545.50.

Both the Sensex and Nifty are now more than 10% below their respective record highs from September. Over just these five sessions, the indices have lost nearly 4% of their value.

By the end of the trading day, the Sensex settled 984.23 points lower at 77,690.95, while the Nifty closed at 23,559.05, down 324.4 points.

Broader markets underperformed the major indices, with the Nifty Midcap and Nifty Smallcap indices each falling more than 2.5%.

Market Overview and Expert Insights

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the ongoing volatility is largely driven by global factors, particularly the sharp rise in the US dollar and bond yields following Donald Trump’s election victory. The rise in US 10-year bond yields to 4.42% has raised concerns about further outflows from emerging markets, including India.

Vijayakumar also highlighted that sectors like cement, metals, and petroleum refining are experiencing a growth slowdown, advising investors to focus on safer sectors such as banking, new-age digital companies, pharma, and IT, where growth prospects remain strong.

In the Sensex pack, only four stocks closed in the green—Tata Motors, NTPC, Asian Paints, and Infosys—while the remaining 26 stocks were in the red. The biggest losers included M&M, Tata Steel, Adani Ports, JSW Steel, and IndusInd Bank.

Sector-wise, all major indices closed lower, with Nifty Realty seeing the biggest drop of 3.2%, followed by Nifty PSU Bank (-2.2%) and Nifty Metal (-2.66%). Other sectors like Nifty Bank, Nifty Auto, and Nifty Media also fell by over 2%, while Nifty Financial Services, Nifty Pharma, and Nifty Oil & Gas shed more than 1.5% each. Nifty IT and Nifty FMCG showed the smallest declines, falling by 0.5% each.

Four Key Reasons Behind the Market Decline

1. Rupee Weakness

The Indian rupee weakened by 1 paisa to reach a historic low of 84.40 against the US dollar in early trading on Wednesday. This depreciation was driven by persistent foreign fund outflows and the strength of the US dollar. Forex traders also saw significant volatility in the USD/INR pair, as the rupee edged closer to its all-time low. According to an SBI research report, the rupee could weaken further by 8-10% against the US dollar, especially in light of Donald Trump’s return to the White House.

2. Dollar Surge

The US dollar index surged by 1.8% in November, partly driven by the impact of Trump’s victory in the US election. It reached a high of 105.98, the highest level since July, putting pressure on emerging market currencies, including the rupee. Additionally, the spike in US 10-year bond yields to 4.42% has raised concerns about further capital outflows from emerging markets to the US, adding to the market’s woes.

3. Continued Foreign Portfolio Investor (FPI) Selling

Foreign investors continued their selling spree for the 32nd consecutive session, offloading ₹364.35 crore worth of Indian shares on Tuesday. November’s total outflows have already reached ₹23,911 crore, following October’s massive ₹1.14 lakh crore exodus. The selling is driven by concerns over high valuations, disappointing earnings, and weak economic indicators. Meanwhile, China’s stimulus measures have attracted foreign investor attention, shifting focus from Indian markets to Chinese stocks.

4. Delayed Rate Cuts and Inflation Concerns

While central banks around the world, including the US Federal Reserve, have begun cutting interest rates, the Reserve Bank of India (RBI) has kept rates unchanged. Rising inflation—fueled by higher food prices due to the extended monsoon season and crop damage—remains a concern. The rupee’s depreciation has further aggravated inflationary pressures, particularly with regard to rising import costs. October’s retail inflation, which spiked to 6.21%, breached the RBI’s upper tolerance limit of 6% for the first time in over a year, dampening expectations of a near-term rate cut.

Expert Opinions

Vinod Nair, Head of Research at Geojit Financial Services: Nair noted that the relentless selling by foreign institutional investors (FIIs), coupled with weak corporate earnings and a sharp rise in domestic inflation to a 14-month high, has further dampened investor sentiment. Small and mid-cap stocks were hit hardest, while sectors like financials and autos also saw significant weakness.

Vikram Kasat, Head of Advisory at PL Capital (Prabhudas Lilladher): Kasat emphasized that the market’s prolonged decline is the result of a combination of factors shaking investor confidence, including ongoing foreign investor sell-offs, poor corporate earnings, and rising inflation. Since late September, foreign investors have withdrawn around $14 billion from Indian equities, with corporate earnings failing to meet expectations. Kasat also noted that with October’s retail inflation climbing to a 14-month high, hopes of an interest rate cut by the RBI in the near term are fading.

 

This downward trend in the market was further exacerbated by the end of weekly Bank Nifty derivatives contracts, which led to additional pressure on banking stocks.