Mumbai: In the biggest single-day fall in four years, benchmark stock indices Sensex and Nifty plunged by nearly 6 per cent on Tuesday, June 4, as counting trends showed the ruling BJP may fall short of a clear majority in the Lok Sabha elections.
Reversing Monday’s sharp gains of over 3 percent, the 30-share BSE Sensex nosedived 4,389.73 points, or 5.74 percent, to close at a more than two-month low of 72,079.05. In the day trade, the barometer tanked 6,234.35 points, or 8.15 percent, to hit a nearly five-month low level of 70,234.43.
The NSE Nifty tumbled 1,982.45 points, or 8.52 percent, to 21,281.45 during the day. Later, it ended at 21,884.50, a sharp decline of 1,379.40 points, or 5.93 percent. Sensex and Nifty had previously declined by around 13 percent on March 23, 2020, when lockdown was imposed due to the COVID-19 pandemic.
Heavy profit booking in PSUs, public banks, power, utilities, energy, oil and gas, and capital goods shares dragged the markets into the deep negative.
“The unexpected outcome of the general election sparked a wave of fear selling in the domestic market, reversing the recent substantial rally. Despite this, the market maintains its expectation of stability within the coalition, led by the BJP as the major election winner, thereby mitigating substantial downside in the medium term.
“This is likely to lead to a major shift in political policy with a focus on social economics, which will have a positive effect on the rural economy,” said Vinod Nair, Head of Research, Geojit Financial Services.
When the Narendra Modi government came to power on May 16, 2014, the Sensex had rallied 261.14 points, or 0.90 percent, to settle at 24,121.74, and the Nifty jumped 79.85 points, or 1.12 percent, to 7,203. The BSE benchmark had hit the 25,000-mark in intra-day trade on that day.
On May 23, 2019, the Sensex declined 298.82 points, or 0.76 percent, to settle at 38,811.39, while the Nifty ended 80.85 points, or 0.69 percent, lower at 11,657.05. The BSE benchmark had hit the 40,000-mark for the first time ever, while the Nifty breached the 12,000-level on that day.
Among the 30 Sensex companies, NTPC plunged over 15 percent, while the State Bank of India tanked more than 14 percent, Larsen & Toubro tumbled over 12 percent, and Power Grid dived more than 12 percent.
Tata Steel, IndusInd Bank, Bharti Airtel, ICICI Bank, Axis Bank, Reliance Industries, and JSW Steel were the other big laggards.
Hindustan Unilever jumped 6 percent, while Nestle climbed 3 percent. Tata Consultancy Services, Asian Paints, and Sun Pharma also emerged as the gainers.
All the sectoral indices, except for FMCG, closed in the red.
Trends from the counting of votes on Tuesday threw up disappointing results for the BJP-led NDA in the Lok Sabha elections, which appears to be losing heavily in its strongholds of Uttar Pradesh, Haryana, and Rajasthan, although it is expected to form the government with about 290 seats.
Foreign institutional investors (FIIs) bought equities worth Rs 6,850.76 crore on Monday, according to exchange data.
In Asian markets, Seoul and Tokyo settled lower, while Shanghai and Hong Kong ended with gains.
European markets were trading lower. US markets ended on a mixed note on Monday.
Global oil benchmark Brent crude declined 1.88 percent to USD 76.89 a barrel.
Markets jumped sharply on Monday after exit polls predicted a massive win for the BJP-led NDA in the Lok Sabha polls.
The BSE benchmark soared by 2,507.47 points, or 3.39 percent, to settle at a new closing peak of 76,468.78 on Monday, marking its biggest single-day gain in three years. During the day, the barometer jumped 2,777.58 points, or 3.75 percent, to hit a record intra-day peak of 76,738.89.
The NSE Nifty climbed 733.20 points, or 3.25 percent, to finish at 23,263.90. During the day, it soared 808 points, or 3.58 percent, to hit a fresh intra-day all-time high of 23,338.70.
