Why did the Nifty and the Sensex crash so sharply on 13 November?

The sharp fall in the Sensex could be attributed to the following key reasons as under listed below:

a) The markets reacted negatively to the weak IIP numbers. IIP for September came in at (-4.3%) and this is the second successive month of negative growth in IIP.

b) Three estimates by broker and financial institutions have pegged the GDP growth for the September quarter at just 4.2%. These include estimates by SBI, CLSA and Nomura.

c) CLSA has pegged fiscal deficit for the full year at closer to 4.3%, which is way off the government target and could pressure on interest rates.

d) Markets also cracked on expectations that inflation could be higher than anticipated. That eventually turned out to be right as CPI inflation for the month of October came in at 4.62% against the market estimate of 4.25%.

e) Lastly, the global uncertainty also played on the stock markets. Trump had hinted that he would not cut legacy tariffs and that may delay the trade deal. That also raised concerns in the minds of investors.

On top of all these factors, the rupee also weakened sharply beyond the 72/$ mark and that only exacerbated the fall in the Sensex.