New Delhi: The Indian stock market experienced its most severe crash in four years as the Sensex and Nifty plunged over 5% following the national election results. The results revealed that the BJP secured fewer-than-expected seats in the Lok Sabha elections, triggering a massive sell-off that resulted in equity investors losing approximately Rs. 31 lakh crore.
Market Reaction to Election Results:
The Sensex plummeted by 4,389.73 points or 5.74%, closing at 72,079.05. Similarly, the NSE Nifty tumbled by 1,379.40 points or 5.93%, settling at 21,884.50. This sharp decline affected a significant number of stocks, with 3,349 stocks declining on the BSE and 2,438 stocks declining on the NSE.
Intraday Performance and Market Sentiment:
Indian stocks faced their worst intraday fall since March 2020, as initial vote-counting trends suggested that Prime Minister Narendra Modis NDA alliance might not achieve the overwhelming majority predicted by exit polls. At one point, the indexes fell as much as 8.5% during the day, despite having hit record highs just a day earlier.
Expert Analysis:
Anand James, the chief market strategist at Geojit Financial, commented on the markets reaction: Since exit polls were at an extreme, anything that doesnt point to more strength is obviously a negative. Despite exit polls giving a resounding victory for the ruling party, the markets volatility gauge did not go down below 20, as it was pricing in an outlier.
The unexpected election results have introduced significant volatility and uncertainty into the market, leading to substantial losses for investors and marking a significant event in the financial landscape.
