Stock market investors in India experienced a major blow on Tuesday as the key equity benchmark indices completely erased all gains of 2024. The S&P BSE Sensex tanked close to 5,500 points and touched an intraday low of 70,234.43 during the last trading session, a record in almost five months, while the NSE Nifty50 experienced a record single-day drop in over 4 years and touched 21,281.45 during trading.
As the markets settled on the Lok Sabha Elections 2024 vote counting day, the Sensex closed trading nearly 4,400 points down, while the Nifty ended the day at a loss of 5.93 per cent.
This resulted in the equity investors experiencing an erosion of Rs 31 lakh crore in their wealth. The last time the stock markets suffered such a loss was March 23, 2020 when the lockdown was announced owing to the COVID-19 pandemic. This development led to the indices crashing over 13 per cent during the time, reported PTI.
Further, as the election results showed the BJP-led NDA alliance performing at subpar levels against the exit poll predictions, the market capitalisation of the firms listed on the BSE declined by Rs 31,07,806.27 crore to touch Rs 3,94,83,705.27 crore.
Commenting on the bloodbath, Siddarth Bhamre, Head of Research, Asit C Mehta Investment Intermediates Ltd, pointed out that the inability of BJP to secure a majority won’t restrict the NDA from forming the government with the allies. He noted that the markets were anticipating a full majority for the Bharatiya Janata Party and a ‘thumping victory for the NDA’, as these expectations were boosted further by the exit poll projections.
As such, he added, the markets factored in the ‘best possible outcome’, leading to rich valuations. Now, the market might be affected by the challenges that come with a coalition government, the expert noted. He cautioned that the profit booking seen on Tuesday might continue for some time.
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