Sensex down 1,300 points today, Nifty 50 slips to 25,300; why is Indian stock market in the red?

Published on: 07 Nov 2025 at 12:30 PM

Published by: Fact News

Fact News Service

Chandigarh, November 7: The domestic stock market barometer- the Sensex and the Nifty 50- suffered strong losses in intraday trade on Friday, November 7, extending their losing run to the third consecutive session.

In these sessions, the Sensex has crashed over 1,300 points, or 1.6 per cent, while the Nifty 50 has dropped by more than 440 points, or 1.7 per cent.

On Friday, the Sensex plunged over 600 points, or nearly 1 per cent, to an intraday low of 82,670.95, while the Nifty 50, too, dropped by nearly a per cent to an intraday low of 25,318.45. The selloff was broad-based as the Nifty Midcap 100 and the Nifty Smallcap 100 indices also dropped by up to a per cent. Why is the Indian stock market falling?

Let’s take a look at five key factors that are driving the Indian stock market down:

Weak global cues

Weakness in global markets is one of the primary triggers behind the recent selloff in the Indian stock market.

Globally, sentiment has turned cautious over stretched valuations of the “mother market”, Wall Street.

On November 7, major Asian stock markets suffered strong losses, with Japan’s Nikkei and Korea’s Kospi crashing 2 per cent each, following an up to 2 per cent fall on Wall Street overnight.

While investors are now looking for fresh triggers amid dimming prospects for another rate cut by the US Federal Reserve, the ongoing US government shutdown, which began on October 1 and is now the longest in history, has created a dearth of economic data and is creating a sense of uncertainty in the market.

2. Indian market lacks dominance of tech, commodities players

The rally in global markets this year has been largely driven by tech companies, fueled by strong optimism surrounding artificial intelligence (AI). India lacks strong global players in the segment. Experts say this is one of the reasons why Indian stock markets have underperformed this year so far.

3. The “macro” element

India’s gross domestic product (GDP) grew by an impressive 7.8 per cent in the first quarter of the current financial year (Q1FY26), thanks to low inflation.

However, the growth in nominal GDP (economic expansion before adjusting for inflation) declined to 8.8 per cent in Q1FY26 as against 9.6 per cent in the same period last fiscal. This indicates that there is still some weakness in the economy. Concerns over the Indian economy are limiting the gains of the market.

4. Relentless foreign capital outflow

Foreign institutional investors (FIIs) continue selling Indian stocks amid mixed earnings, volatility in the Indian rupee, and fading expectations of further US Fed rate cuts.

So far in November, FIIs have offloaded Indian stocks worth ₹6,214 crore. They have been selling Indian equities since July this year, cumulatively offloading around ₹1.4 lakh crore in the cash segment.

5. Persisting uncertainty over India-US trade deal

Despite many positive signals and the apparent bonhomie between Prime Minister Narendra Modi and US President Donald Trump, the persisting uncertainty over a potential India–US trade deal remains a major headwind for the Indian stock market.