The Indian stock market witnessed a massive downturn today as Sensex and Nifty suffered significant losses following the less than expected seats for the PM Narendra Modi-led NDA in the Lok Sabha results. The equity benchmark indices closed over 5% in the red, marking their worst day in four years. Investors lost a staggering ₹31 lakh crore in wealth in just six-and-a-half hours of trading.
Sensex closed at 72,079.05 points, down 4,389.73 points or 5.74%, while Nifty closed at 21,884.50 points, down 1,379.40 points or 5.93%. Almost all Nifty sectoral indices, except Nifty FMCG, were deep in the red, with Nifty metal, Nifty bank, Nifty financial services, Nifty PSU bank, Nifty private bank, Nifty realty, and Nifty oil and gas witnessing the most significant slumps.
Among the top losers were Adani Ent and Adani Power, while Adani Wilmar and Ambuja Cements managed to trade in the green. The market had initially surged in the pre-open session, with Sensex gaining 1,000 points and Nifty trading above 22,000. However, the gains were short-lived as both indices erased their opening gains and slipped into the red, with top drags including L&T and SBI.
Global markets also played a role in the market sentiment, with oil prices sliding slightly in early Asian trading. Meanwhile, US stocks ended higher on Tuesday following softer-than-expected labor market data, reaffirming expectations of an interest rate cut by the Federal Reserve.
Despite the market turmoil, Goldman Sachs remains overweight on India, stating that macro stability and growth remain intact despite the reduced majority for NDA. The brokerage expects a 15% earnings CAGR in 2024/25, which should drive market returns, favoring domestic sectors.
Overall, the stock market is facing a challenging time as investors grapple with the unexpected election results and global market trends. Stay tuned for more updates on this developing story.
