Indian stock market witness biggest fall in 4 years amid vote counting day
Hindustan Unilever Limited (HUL), Hero MotoCorp, Britannia, Nestle, and Divis Labs were among the top gainers on Nifty, while ONGC, Coal India, and SBI suffered the most.
The Indian stock market experienced a significant downturn on Tuesday, marking its largest fall in four years, as investors grappled with uncertainty surrounding the election results. The indices witnessed a staggering decline, resulting in investors losing nearly Rs 30 lakh crore within a single trading session.
As the final phase of the Lok Sabha election 2024 polls progressed, the Sensex plummeted by 4,389 points, or 5.74%, to close at 72,079, while the Nifty dropped by 1,379 points, or 5.93%, settling at 21,884 by the end of Tuesday's trading.
The Nifty Bank was not spared either, suffering a substantial loss of over 4,051 points, or 7.95%, ending the day at 46,928.
Despite a few exceptions like Hindustan Unilever Limited (HUL), Hero MotoCorp, Britannia, Nestle, and Divis Labs, which witnessed gains, the majority of stocks faced a downturn. Companies such as ONGC, Coal India, and SBI experienced significant losses.
The market witnessed a broad-based decline, with most sectoral indices trading deeply in the red. Sectors such as realty, telecom, metal, oil & gas, power, and PSU banks experienced declines exceeding 10%.
Both the BSE midcap and smallcap indices were down by 7-8%.
Experts attributed the market correction to margin calls, particularly affecting retail investors with heavily leveraged positions. Rupak De, senior technical analyst at LKP Securities, noted, “Immediate support is visible at the psychological level of 22,000, below which the index might fall further towards 21,400-21,500. Recovery looks possible once the trend moves in favour of the BJP winning the elections comfortably.”
The unexpected outcome of the general elections triggered fear selling in the domestic market, reversing the recent substantial rally.
Despite the uncertainty, experts suggest that the market maintains its expectation of stability within the coalition led by the BJP, which emerged as the major election winner. This expectation mitigates a substantial downside in the medium term.
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