A man walks past a bull statue in the BSE building. File | Photo source: PTI
Uncertainty over the general election outcome led to panic in Indian stock markets, with major benchmark indices falling by around 1.5%.
The S&P BSE Senesx index fell 1,062 points or 1.45% to 72,404. The NSE Nifty-50 index also lost 345 points or 1.55% to 21,957.5.
“There were murmurs [in the market] with lower-than-expected turnout in the polls, which may hamper the Modi government’s comeback,” said Ambareesh Baliga, an independent stock analyst, adding that confidence in the prime minister’s ‘400 plus (seats)’ campaign has weakened and “unresolved investors” have risen.
Only the car is stable
With the exception of automotive companies, major sectors led by energy, metals and real estate faced selling pressure. Larsen & Toubro, which lost 6%, dragged Sensex shares lower, followed by Asian Paints and JSW Steel, which fell 4.68% and 3.64% respectively.
Delegation of Mr. Baliga, Deven Choksey, MD, K.R.Choskey Shares & Securities Pvt. Ltd. added, “FIIs (foreign institutional investors) are selling mainly due to fear of lack of clear majority (for either party).”
“If the result is unexpected, the market may sharply correct the results after publication. However, investors do not want to wait until then and are selling now. When everyone thinks similarly, the fall is stronger,” Baliga added. He warned against breaking support levels if markets decline further on Friday, leading to sharper sell-offs.
“There is also a fear that SEBI (Securities and Exchange Board of India) will adopt stricter norms to restrict trading of indices and derivatives. Before this happens, FIIs exit their positions, which creates pressure on others to sell,” he added.
