Markets saw a bloodbath on D-Street throughout the day as the BJP-led NDA trailed the mark of 300 seats in India’s general elections 2024. The Nifty 50 closed 1,379 points or 5.93% lower at 21,884. Similarly, the BSE Sensex plunged 4,389.73 points or 5.74% lower at 72,079. Bank Nifty slumped 4,051 points or 7.95% to 46,928.60. Adani Group companies saw a major sell-off. They were down as much as 21%. Reliance Industries, HDFC Bank, ICICI Bank, L&T, and SBI were the major movers of the Nifty 50 on June 04. The India VIX on Tuesday closed 23.64% higher at 25.89 after shooting up more than 51% on political jitters during the trading hours on June 04.
Nifty Midcap 100 tanked 4,203 points or 7.88% to settle at 49,150. Broader markets also felt the brunt with smallcap and midcap stocks closing in the red. Power Stocks were hit hard, NTPC, Power Grid, BHEL, NHPC and many others. They got quoted as low as 28% during the session. PSU remained the biggest loser on June 04. REC, PFC, Concor, BEL, and many others fell as much as 24%.
However, in the weak market, Nifty FMCG extended a helping hand and closed in the green up 519 points or 0.95% at 55,172.50.
To give a broader perspective, 2,438 stocks closed below their previous close out of 2,750 trading stocks on the National Stock Exchange and just 242 stocks closed in the green.
“Stock markets witnessed a sell-off due to the below expectations seats to the current establishment. However, this is a temporary phase. The long-term story remains intact. After the initial alignment of stock prices with current realities, markets should be headed higher as focus will return to corporate earnings, falling oil prices which help control inflation and talks of resolution of the war in Gaza will also aid sentiment in the long run. US elections are due in November 2024 and US markets are typically buoyant ahead of elections. That will have a rub-off effect on emerging markets, including India,” said Vijay L Bhamwani, CEO of Bsplindia, a proprietary trading firm.
“Investors like certainty and continuation of policies. India is a long-term structural growth story. A lot of elements are in place. Over anything the economics should prevail. We are already at the top in factors like GDP, market cap, demographic dividend etc. It will be an endeavour for all the policymakers to take the country to further heights. I don’t think any derailment of these efforts is in anybody’s interest. As a country, we have seen many regime changes. Businesses and markets have weathered all of it and good businesses have always rewarded the investors. If valuations get more reasonable from here on because of some factors, more reason to invest in India further,” said Manish Jain, Director of Institutional Business (Equity & FI) Division at Mirae Asset Capital Markets.
