Indian Stock Market Plunges on Election Nervousness
The Indian stock market witnessed a significant selloff on Thursday, May 30, as investors remained on edge ahead of the Lok Sabha election 2024 results. The Sensex and the Nifty 50 both experienced their fifth consecutive session of losses, with each dropping by about 2 per cent over this period. This resulted in investors losing nearly ₹10 lakh crore in market value.
The uncertainty surrounding the election outcome has been growing in the last few days, leading to nervousness among market participants. The final phase of the election is scheduled for Saturday, June 1, with the counting of votes set to begin on June 4. While most experts expect the BJP-led NDA to be re-elected, there are concerns about the strength of the alliance’s majority.
Avinash Gorakshkar, Head of Research at Profitmart Securities, commented, “After six phases of Lok Sabha Elections, the market is still unconvinced about the kind of government formed after the Lok Sabha Polls.”
In addition to election-related concerns, weak global cues, rising US bond yields, geopolitical tensions, and diminishing hopes of early rate cuts have also contributed to the recent downturn in the Indian stock market.
The Sensex closed the day with a loss of 617 points, or 0.83 per cent, at 73,885.60, while the Nifty 50 ended at 22,488.65, down 216 points, or 0.95 per cent. The mid and small-cap segments also saw significant declines, with the BSE Midcap and Smallcap indices falling by 1.21 per cent and 1.33 per cent, respectively.
Overall, the market capitalisation of BSE-listed firms dropped to nearly ₹410.7 lakh crore from nearly ₹415.1 lakh crore in the previous session, resulting in investors becoming poorer by about ₹4.4 lakh crore in a single day.
As the market continues to react to election-related uncertainties and other external factors, investors are advised to closely monitor developments and exercise caution in their investment decisions. Stay tuned for more updates on this developing story.
