Five factors that changed markets on the Lok Sabha Election Results day

Lok Sabha Election Results impact on markets: Within a few hours, the matters in Sensex changed drastically. Investors emotions shifted from enthusiasm to cautious note in the midst of Lok Sabha Elections 2019 results, despite NDA government bagging a win. The D-day was divided into two parts, in the first half, there was no stopping in Sensex, as the index clocked for the first time over 40,124-levels. However, when the verdict was clear of which party will get charge for another 5 years in India, sentiments shifted so much that, investors made heavy profit booking. The outcome was Sensex from gaining over 900 points, have now ended losing a huge 1,473 points by touching an intraday low of 38,651.61. The surprising fact was that all this happened in just 1 day. 

However, the Sensex finished at 38,811.39 down by 298.82 points or 0.76%. A host of factors decided the course of this benchmark. Let’s find out! 

1 Profit booking in large caps!

The losers list on Sensex involved a number of large caps. The list was led by Vedanta dropping by 5.53% ending at Rs 157.25 per piece. Vedanta was joined by stocks like ITC at Rs 288.50 per piece down 3.69%, HDFC Bank at Rs 2,334.35 per piece down 2.94%, Tata Motors at Rs 175 per piece below 2.48%, Bajaj Finance at Rs 3,377.95 per piece lower by 2.02% and Sun Pharma at Rs 413.25 per piece below 1.76%. 

Other stocks that plunged were Tata Steel, ONGC, TCS, HDFC, Infosys, HUL, Reliance Industries, Axis Bank and M&M in the range of 0.20% to below 2%. 

2. Selling in FMCG, Consumer durables and metal stocks! 

Sector-wise, it would be consumer durables which took most beating. The S&P BSE Consumer Durables finished at 24,154.37 down by 279.11 points or 1.14%. Losers here were Symphony, TTK Prestige, WhirlPool, Titan, VIP Industries, Voltas and Bajaj Electricals dropping between 0.24% to 3.55%.

FMCG sector was second to face heat, as the S&P BSE FMCG index completed at 11,481.84 below 212.42 points or 1.82%. Here, major stocks that tumbled were ITC, Parag Milk, Triveni, Godrej Phillips, Uttam Sugar, Future Consumer, Apex and Tata Global Beverages. 

Apart from the above two, even metal stocks were on the hit list. The S&P BSE Metal ended at 10,487.84 down by 167 points or 1.57%. Stocks like Vedanta, SAIL, Hindalco, National Aluminium, Hindustan Zinc, Jindal Steel and JSW Steel were losers. 

3. Other sectors! 

Stocks from sectors like information technology, healthcare, teck, realty and oil & gas also faced heat. 

4. Rupee: 

Following domestic markets, the Indian rupee also surrendered its early gains during the second half of the trading session against US dollar benchmark index at interbank forex market.  The domestic currency finished at 36 paisa lower earmarking above 70.02 levels  against the dollar. In previous trading session, the rupee finished at 69.66-levels per dollar. Days before election voting verdict, were positive for rupee as the currency appreciated against dollar. However, by end of Thursday, tables turned. 

5. Ground realities!

Explaining the unexpected slide in Sensex and overall Indian markets, Romesh Tiwari, Head of Research, CapitalAim.

As expected and predicted by exit polls the BJP is going to form the government again. Markets already had rallied on Monday and today after the trends started confirming BJP's win Sensex and Nifty hit their new highs. But now the market will have to catch up with ground realities of the economy and global factors. Global markets are showing weakness due to US-China trade worries and so our market may settle down or even turn negative in the short term.”