DBT Bureau
Bengaluru, 4 June
Indian market tanked on Tuesday as poll results of the Indian General Elections showed BJP-led NDA failed to get an emphatic majority, creating fears over the fate of economic reforms under the next government.
The Nifty ended the day at 21,884.50, down 1,379 points after touching a low of 21,281 during the day. The Sensex tumbled 4,389 points to finish at 72,079.05, after having hit 70,234 intra-day. Both the major indices fell more than 6% as the euphoria created in the last few days after the exit poll predictions turned into panic among the investors. Investors lost around Rs 40 lakh crore with mid and small-cap stocks correcting more than 6-7% on Monday.
The Indian rupee also slumped on Tuesday in line with the selloff in local equities. The rupee closed at 83.53 against the U.S. dollar, down 0.47% on the day, its worst single-day percentage fall since February last year.
The market saw a wide selloff in public sector enterprises stocks as investors anticipate that the next government may not be able to push unpopular economic reforms. The next government also may not be able to focus on capital expenditure in the coming years.
Every single sectoral index with the exception of FMCG closed in the red. Banks, realty, and PSU stocks saw heavy selling falling the most. While the PSU Banks index and the CPSE Index on the NSE fell 15%, the Realty index fell 9%; and the Nifty Bank fell 7%. Adani Group stocks were among the worst losers of the day.
As this report gets written, BJP-led NDA is expected to win 290 seats with BJP bagging around 239 seats. The opposition led by the principal opposition Congress Party bagged about 235 seats.
Results showed that the ruling party got the major setback in Hindi heartlands including Uttar Pradesh, where the party lost many seats as compared to its 2019 tally. Similarly, it lost seats in Maharashtra where the ruling coalition was not able to put forth a good show. It also erased gains in states like West Bengal and Karnataka. Only a few states like Odisha and Andhra Pradesh supplemented the seat tally of the NDA block.
In comparison, the INDIA block led by the Congress party gained substantial seats with Congress and the Samajwadi Party (SP) making major gains in the key states of Uttar Pradesh. The INDIA block also gained seats in Maharashtra, Rajasthan, West Bengal, Tamil Nadu, and Kerala.
