Stock Market
Market crash: Sensex, Nifty 50 fall for 5th consecutive session; drops over 9% from peak
Mumbai/IBNS: Indian markets continued their downward trend for the fifth consecutive session on Wednesday (Nov. 14) influenced by weak global cues, a strengthening dollar, a depreciating rupee, and persistent foreign investor outflows.
The Sensex dropped by 559.39 points, or 0.7 percent, reaching a low of 78,115.79, while the broader Nifty fell 203 points, or 0.8 percent, to an intra-day low of 23,680.50.
Both indices are now more than 9 percent below their record highs set at the end of September, with losses exceeding 3 percent over these last five sessions.
Broader markets underperformed the benchmarks as well, with the Nifty Midcap and Nifty Smallcap indices each declining by around 2 percent.
On the BSE Sensex, only five stocks closed in positive territory: NTPC, ITC, Tata Motors, Titan, and HUL.
The rest, including top losers Tata Steel, M&M, JSW Steel, Adani Ports, and PowerGrid, finished in the red.
All sectoral indices saw declines, with Nifty Realty dropping the most at 2.66 percent, followed by Nifty Metal (2.2 percent) and Nifty Auto (1.9 percent).
Other indices such as Nifty PSU Bank and Nifty Media also fell 1.7 percent each, while Nifty Bank, Nifty Fin Services, Nifty Pharma, and Nifty Oil and Gas dropped between 0.9 percent and 1.5 percent.
Nifty IT experienced the smallest decline, at 0.4 percent.
Analysts have identified some reasons for the recent stock market crash.
Weakening Rupee: The rupee dropped by 1 paisa to reach a new low of 84.40 against the US dollar in early Wednesday trading, weighed down by sustained foreign fund outflows and a soft trend in domestic equities.
Forex markets saw significant volatility in the USD/INR pair as the rupee approached its all-time low, with global factors, including the stronger Dollar Index, primarily driving this weakening.
An SBI report earlier in the week suggested that the rupee could decline by 8-10 percent against the dollar if Donald Trump secures a second term as US president.
Soaring US Dollar: The Dollar Index has surged by 1.8 percent in November, reaching 105.98—its highest since July—following Donald Trump’s US election victory.
This rise, coupled with a spike in US 10-year bond yields to 4.42 percent, has increased pressure on emerging market currencies.
Elevated bond yields are also expected to drive further capital outflows from emerging markets to the US.
Continued FPI selling: Foreign Portfolio Investors (FPIs) have sustained their selling for the 32nd straight session, offloading Rs 364.35 crore on Tuesday (Nov. 12) and bringing total outflows in November to Rs 23,911 crore.
October saw a major exodus of Indian stocks, with FPIs selling shares worth Rs 1.14 lakh crore, amid concerns over high valuations, slower earnings growth, and weakening economic data.
Additionally, recent stimulus efforts by China have attracted foreign investors, pulling funds away from Indian markets toward Chinese equities.
Concerns of US Fed rate cut: While global central banks, including the US Federal Reserve (Fed), have been cutting interest rates, the Reserve Bank of India (RBI) has held its rates steady.
Persistently high inflation, driven by rising food prices due to the extended monsoon and crop damage, remains a significant challenge.
The rupee's decline further complicates the situation, as it raises import costs and could drive inflation higher.
October’s retail inflation rose by 6.21 percent, exceeding the RBI’s 6 percent tolerance limit for the first time in over a year.
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