Massive Selloff in Indian Stock Market as Election Results Surprise Investors
In a dramatic turn of events, the Indian stock market witnessed a massive across-the-board selloff on Tuesday, June 4, as vote-counting trends indicated a stark deviation from the exit polls’ predictions. The Nifty 50 and Sensex indices plummeted, reflecting investor concerns over the unexpected election outcome.
As the counting of votes progressed, it became evident that the Bharatiya Janata Party (BJP) was falling short of securing a clear majority, raising doubts about the stability and policy continuity of the new government. The BJP-led National Democratic Alliance (NDA) was expected to form a government with a slim majority, further fueling uncertainty among investors.
The Nifty 50 opened at 23,179.50 and plunged 8.5% to hit an intraday low of 21,281.45, while the Sensex opened at 76,285.78 and dropped 8.2% to 70,234.43. The Sensex closed with a massive loss of 4,390 points, or 5.74%, at 72,079.05, and the Nifty 50 ended with a cut of 1,379 points, or 5.93%, at 21,884.50.
This single-day fall marked the biggest percentage decline for the Nifty 50 in over four years, reminiscent of the losses seen during the early days of the COVID-19 pandemic. The market capitalization of BSE-listed firms also took a hit, shedding nearly ₹31 lakh crore in value.
The volatility index India VIX surged by 24%, indicating heightened nervousness in the market. Mid and smallcap indices witnessed sharp declines, with the BSE Midcap index falling 8.07% and the BSE Smallcap index plunging over 10% in intraday trade.
Several stocks, including Bajaj Finserv, HDFC Life, and SBI Card, hit fresh 52-week lows, reflecting the widespread sell-off across sectors. The top losers in the Nifty 50 index included Adani Ports, Adani Enterprises, ONGC, NTPC, and Coal India, while Hindustan Unilever, Britannia, and Nestle emerged as the top gainers.
Sectoral indices also painted a grim picture, with Nifty PSU Bank, Nifty Oil & Gas, and Nifty Metal leading the losses. Nifty Bank and Financial Services indices also witnessed significant declines, while Nifty FMCG managed to close higher amidst the turmoil.
Experts expressed mixed views on the market outlook, with some anticipating continued choppiness and others suggesting opportunities to accumulate quality stocks at discounted prices. Technical analysis pointed to a bearish trend, with key resistance and support levels identified for traders to navigate the volatile market conditions.
As investors grapple with the aftermath of the unexpected election results, the Indian stock market remains on edge, awaiting further developments that could shape its trajectory in the coming days.
