(Image source from: Thequint.com)
On the day of vote tallying for the Lok Sabha Election 2024, the Indian equity benchmarks Nifty 50 and Sensex experienced a substantial decline. The markets reversed all the gains they had made the previous Monday. The Sensex dropped by 4,000 points, while the Nifty fell by 929.80 around 11 AM. This was Nifty's most significant intraday decline since February 2022, leading to a staggering loss of over Rs 18 lakh crore in investor wealth. Investors on Dalal Street witnessed a massive loss of Rs 9 lakh crore within just 15 minutes as the Sensex plunged. The benchmark indices were expected to open high, as the vote counting had commenced that morning. On the previous Monday, the Sensex and Nifty had surged over 3 percent, closing at all-time highs, driven by broad-based buying as exit polls had predicted a decisive victory for the BJP-led NDA in the general elections. The 30-share BSE Sensex had skyrocketed by 2,507.47 points, or 3.39 percent, to reach a new closing high of 76,468.78, marking its largest single-day gain in three years. Throughout that day, the index had climbed 2,777.58 points, or 3.75 percent, to achieve a record intraday high of 76,738.89.
According to the latest exit polls, Prime Minister Narendra Modi and his National Democratic Alliance (NDA) are poised for a comfortable victory in the Lok Sabha elections, securing a substantial majority. However, the stock market has reacted with a significant decline, with the total market capitalization of BSE-listed companies plummeting by nearly Rs 21.5 lakh crore by late morning. The market had anticipated an NDA victory, and any deviation from the expected outcome could be a source of disappointment for investors. The Nifty experienced its worst single-day decline in over two years, with the Sensex crashing over 3,200 points and the Nifty dipping below 22,250. This market turmoil has resulted in the erosion of over Rs 21 lakh crore in investor wealth. Meanwhile, stocks such as HUL, Dabur India, DMart, Force India, AB Cotspin India, Future Retail, and Avenue Supermarts have bucked the overall market trend. Industry experts, like Kranthi Bathini of WealthMills Securities, believe that if the NDA's seat count falls below 300, it would be a significant disappointment for the bulls. The Indian market volatility index, VIX, has surged by 39%, reflecting the heightened uncertainty. Several blue-chip companies, including Larsen & Toubro Ltd., Hindustan Aeronautics Ltd., Siemens India Ltd., ABB India Ltd., Data Patterns Ltd., and Thermax Ltd., have also seen significant price movements.
The brokerage firm Jefferies has identified seven prominent industrial companies that are expected to thrive under the potential re-election of the Narendra Modi-led NDA government. These top picks include Larsen & Toubro, Siemens, Thermax, Bharat Electronics, Havells India, ABB India, and KEI Industries Ltd. This selection reflects the brokerage's optimism about the industrial sector's prospects under the anticipated continuation of the current political leadership. Among the 30 Sensex companies, Larsen & Toubro, Power Grid, NTBC, State Bank of India, Reliance Industries and HDFC Bank were the top laggards. Shares of all 10 Adani group companies fell on Tuesday amid the ongoing Lok Sabha polls. In particular, Gautam Adani's flagship Adani Enterprises led the downtrend with an 8% decline. The rupee fell 26 paise to 83.40 against the US dollar in early trade on Tuesday as early Lok Sabha poll results showed a mixed trend.
