a man checks stock market news on a massive screen as Sensex opened in the red when counting began on June 4. | Photo source: ANI
Benchmark equity indices Sensex and Nifty started trading on June 5 on an upbeat note after a acute slump in the previous trade as value buying at lower levels led to an uptrend in the markets.
Making a powerful comeback after its acute decline on June 4, the 30-share BSE Sensex rose 948.83 points to 73,027.88 in early trade. The NSE Nifty index rose 247.1 points to 22,131.60.
While the NDA is well above the majority threshold of 272 in the 543-member Lok Sabha, the BJP has failed to reach the magic number for the first time since 2014 and is completely dependent on its allies to form the government.
The Election Commission announced the results in all 543 Lok Sabha constituencies with the BJP winning 240 seats and the Congress 99.
“Despite the reduced majority, we expect the Modi 2.0 policy agenda (investment-led growth, capital expenditure, infrastructure creation, manufacturing, etc.) to continue, albeit with some tweaks. We also expect some populist measures to address rural stress and lift sentiments on the fringes, given the nature of the verdict,” according to a report by Motilal Oswal Research.
Among the 30 Sensex companies, Hindustan Unilever, Nestle, Asian Paints, HCL Technologies, HDFC Bank, Kotak Mahindra Bank and ITC were the biggest gainers.
Laggards included Larsen & Toubro, Power Grid, NTPC and State Bank of India.
“The market will take some time to absorb the unexpected election results. Stability will return to the market soon, but volatility will persist until there is clarity on the government’s composition and key portfolios,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
He added that one positive of the acute market correction is that excess valuations have softened somewhat, which will facilitate institutional buying once there is clarity on the formation and composition of the government.
In Asian markets, Seoul and Hong Kong recorded gains, while Tokyo and Shanghai recorded declines.
On June 4, American markets ended the session in positive territory.
Global price benchmark Brent crude fell 0.04% to $77.49 a barrel.
According to stock exchange data, foreign institutional investors (FIIs) withdrew shares worth ₹ 12,436.22 crore on June 4.
On June 4, markets had their worst trading day in four years as the BJP failed to hit the magic number for the first time since 2014.
The benchmark BSE Sensex fell 4,389.73 points or 5.74% to touch an over-two-month low of 72,079.05 on June 4. During the daily session, the barometer fell 6,234.35 points, or 8.15%, to an almost five-month low of 70,234.43.
The NSE Nifty index fell 1,982.45 points or 8.52% to 21,281.45 during the day. It later ended at 21,884.50, down sharply by 1,379.40 points or 5.93%.
