IT News
Imphal, June 4:
The stock market experienced a dramatic downturn on Tuesday, plummeting over 6% and marking its worst intraday percentage fall in four years. The Sensex crashed 6.1% to 71,900 points, while the Nifty tumbled 6.2% to 21,824 points. This significant drop, the biggest since March 2020, wiped out approximately Rs. 45 lakh crore from the total market value of companies.
This decline erased all the gains made on Monday, when exit polls predicted a strong win for the BJP-led NDA alliance, leading to a surge in market optimism. The Sensex had surged over 2,000 points, and the Nifty recorded its biggest jump in four years, adding Rs. 12.48 lakh crore to the market cap of BSE stocks, with both indices hitting record highs.
However, early vote counting trends on today revealed that Prime Minister Narendra Modi’s alliance might secure fewer seats than anticipated, falling short of the expected landslide victory. The BJP-led NDA was reported to be leading in nearly 300 seats, much lower than the 350+ seats predicted by exit polls. This discrepancy led to a spike in market volatility, with the volatility index jumping to 29.79 points, its highest level since March 2022.
Stocks across all sectors faced heavy selling. Banking shares plunged 7.8%, real estate fell 9.1%, and infrastructure declined 10.5%. Shares of Adani group companies were particularly hard hit, with Adani Enterprises and Adani Ports crashing 19% each, and other Adani stocks dropping between 9-19%.
Market experts attributed the sharp sell-off to the high expectations set by the exit polls. “Since exit polls were extremely favourable, anything short of that is obviously negative for markets,” said Anand James of Geojit Financial. Mayuresh Joshi of William O’Neil added, “Markets were pricing in a bigger majority based on exit polls. The fear now is whether the current numbers will drop further, leading to an element of disappointment.”
While the BJP seems set to form the next government, analysts predict continued market volatility until there is more clarity on government formation and policy announcements. Investors are advised to proceed with caution as the market adjusts to the actual election outcomes, contrasting sharply with the earlier exit poll projections.