Sensex Drops 3% as NDA Emerges as Front-Runner in Elections
Several parts of India have completed the seven phases of casting a vote of Lok Sabha Election 2024 and now it is the time of vote counting. The impact of the results is also visible in the Indian stock market. The market opened with a crash after a sharp rally in Monday’s session, as early vote-counting trends indicated the winning of Prime Minister Narendra Modi’s Bharatiya Janata Party-led alliance. As of the vote counting display the BJP is leading more than 272 seats, however, the extent of the winning was unclear.
At 09:30 AM, the NSE Nifty 50 index was lower by 3.03% to 22,572 and the S&P BSE Sensex was down 3 per cent to 74,107. Even the shares of Adani Group also witnessed a downfall of 18%. This crash of Adani Group stocks marks a stark contrast to the significant gains that the investors enjoyed in few trading sessions. The unexpected slump seems to have happened due to the unwinding of speculative positions, as investors opted to cash in on profits or scale back their investments. Whereas the benchmarks rose to 3% on 3 June, hitting record highs and logging their best session in nearly 3 years after exit polls projected that the BJP-led alliance would likely get a two-thirds majority in the lower house.
Besides it, according to the early trends, the NDA is presently on the top with a probable winning of 288 seats whereas the INDIA bloc is ahead with a probable winning of 213 seats.
HDFC Bank, State Bank of India, Power Grid, Reliance, NTPC, Larsen & Toubro were the best laggards in SenSex of the 30 companies. Only Nestle and Sun Pharma witnessed a gain. As per exchange data, Foreign Institutional Investors (FIIs) purchased equities worth Rs 6,850.76 crore on 3 June 2024. Speaking of Asian markets, Hong Kong is performing well with gains in Sensex whereas Tokyo, Seoul and Shanghai witnessed the loss. Whereas US markets concluded Monday’s session on a mixed note. Last but not least, Global oil benchmark Brent crude was down 0.68% to $77.83.
Furthermore, as the Sensex plunged, the Investors on Dalal Street faced a staggering loss within 15 minutes. The investors lost Rs 9 lakh crore in a short period.
Benchmark stock indices Nifty and Sensex were assumed to start the market with a profit as the counting of votes for Lok Sabha elections started on Tuesday morning.
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Nifty and Sensex grew over 3% to close at all-time highs on Monday. The 30-share BSE Sensex soared by 2,507.47 points or 3.39% to reach a new closing high of 76,468.78 marking its largest intraday profit in 3 years. Throughout Monday, the index surged over 3.75 per cent or 2,777.58 points to achieve a record intraday high of 76,738,89.
On Saturday, Exit polls indicated that the Prime Minister was leading the Lok Sabha election 2024 and poised to secure the seat of PM for the third time as the BJP-led NDA showcased to victory a substantial majority in the Lok Sabha elections.
Besides it, Nifty has witnessed its most significant intraday downfall since February 2022 which led to a loss of nearly Rs 18 lakh crore in investor wealth. The investors of the Stock Market are facing a loss of Rs 21.5 lakh crore in wealth. This loss drops the combined market capitalisation of all the companies that are listed on the BSE to Rs 404.42 lakh crore.