Benchmark indices Nifty and Sensex deepened their slump on November 13, marking their fifth consecutive day of losses as markets grappled with a raft of investor worries. Both indices recorded their steepest drops in five months in early trade, with a broad-based sectoral sell-off amplifying the slide. Lingering uncertainties such as inflation (highest in 14 months), rich valuations, and a disappointing Q2 are causing panic among investors.

At noon,  the Sensex was down 496.54 points or 0.63 percent at 78,178.64, and the Nifty was down 181.50 points or 0.76 percent at 23,702.00. About 550 shares advanced, 2766 shares declined, and 73 shares unchanged.

Mid- and small-cap indices followed the downward trend, sliding 2 percent and 2.3 percent, respectively. These broader markets, which have surged nearly 25 percent year-to-date compared to Nifty’s 13 percent rise, showed signs of fatigue. Time and again, market experts have expressed concerns over inflated valuations in the space. Meanwhile, the market volatility index India VIX rose over 5 percent, rising over 15 levels.

Sectoral Trend

All sectors took a hit, with Nifty Auto leading the plunge, down nearly 2 percent in early trade. Major auto stocks like M&M, Maruti Suzuki, Bajaj Auto, and Hyundai Motor dropped as much as 5 percent, weighing heavily on the index. Other sectors joined the slide: Nifty Pharma, Healthcare, and Realty each declined up to 1 percent, while Nifty Bank, Energy, FMCG, Infra, and Metal also slipped by around 1 percent on the bourses. The widespread sell-off reflected growing investor unease across the board.

Fundamental View

While the US economy remains resilient, India's growth outlook is clouded by concerns, and the Euro Zone is grappling with weakness. Adding to the volatility is the unpredictable market impact of the Trump victory, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He added that from an emerging market standpoint, the rising dollar index and a sharp jump in the US 10-year bond yield to 4.42 percent are emerging as significant worries. These high yields are expected to fuel capital outflows from emerging markets, including India, creating a headwind for local growth.

Technical View

"Currently, the Nifty is 4.3 percent below its 50-day simple moving average (SMA), the widest gap since late September, when the market was hitting record highs before a sustained decline followed. Additionally, some indicators show a positive divergence, hinting at the possibility of a reversal," Anand James of Geojit Financial Services, said. "However, if the Nifty fails to stay above 23,816 after initial weakness, it may dampen hopes for a recovery. For now, the 200-day SMA near 23,500 remains an important level to watch," he added.

Key Nifty Gainers

NTPC, Tata Motors, and Trent

Key Nifty Losers

Hindalco, Eicher Motors, and M&M

Key Sensex Gainers

NTPC, Tata Motors, and ITC

Key Sensex Losers

M&M, Tata Steel, and JSW Steel

Stock Moves

Hyundai Motor India: Shares slipped as much as 5 percent to Rs 1,714 in early trade on November 13, extending losses for a third trading session in a row after the company reported a weak set of numbers in the second quarter. In Q2, its consolidated net profit fell 16 percent to Rs 1,375 crore due to lower domestic sales, geopolitical factors, and exports, its first earnings report since listing.

Nykaa: Shares jumped up to 5 percent as it reported positive earnings for the quarter ended September 30, 2024 (Q2FY25). Given the solid results, Nuvama maintained its 'Buy' rating on the stock. However, the brokerage cut estimates due to an overall slowdown in the industry and elevated marketing spending. The target price has been revised downwards to Rs 205 from Rs 220 earlier.

KNR Constructions: Shares skyrocketed 14 percent to Rs 324 per share on November 13 after it reported blockbuster July-September quarter (Q2FY25) performance. The company's net profit jumped by a whopping 310 percent year-on-year (YoY) or four-fold to Rs 585 crore in Q2FY25 from Rs 143 crore in the year-ago period.