Election Results 2024: Sensex Nifty 50 Cracks & Investors Loose

The primary equity indices started Tuesday’s trading session on a down note, following the markets' best performance in three years on the previous day. Banks are facing significant pressure, with the Bank Nifty dropping more than 300 points.

By approximately 11:00 am IST, the 30-share BSE Sensex had suffered a significant loss of 2,829.61 points or 3.7%, trading at 73,639.17. Similarly, the NSE Nifty had fallen by 877.35 points or 3.77%, trading at 22,386.55.

Around the same time, the Nifty Bank index plummeted by 2,661.35 points or 5.21%, trading at 48,355.80. The broader market indices also experienced significant declines. Meanwhile, the India VIX index surged by 34.01% to rise above the 28 level.

Commenting on the markets, Jyoti Prakash Gadia, Managing Director at Resurgent India, stated that the anticipated landslide victory predicted by exit polls does not appear to be materializing as trends emerge. This uncertainty might prompt the government to reconsider its stance on difficult economic reforms, potentially resulting in less aggressive measures than previously expected.

She also mentioned that the focus might partially shift towards grassroots welfare schemes and employment generation. Nevertheless, the overall growth trajectory is expected to remain stable, with a continued emphasis on infrastructure development, which could become a consensus strategy in the long run.

Shares of Adani Group companies experienced significant pressure, dropping 15% on June 4. The sell-off is being influenced by the possibility of the I.N.D.I.A. bloc securing a substantial number of seats, potentially resulting in a strong opposition in Parliament.

Adani Green Energy, a power generation company, plummeted 6% to ₹1,918, resulting in a market cap of ₹3.04 lakh crore, down from its previous close of ₹2,037.65. Adani Wilmar and Adani Total Gas also experienced declines, falling 4% and 7% to ₹353.50 and ₹1,044.95, respectively.

The volatility index, India VIX, surged 33.33% to 28.05, reaching its highest level in nine years. The India Volatility Index, or VIX, introduced by the NSE, reflects the market's expectation of fluctuations, providing investors with an insight into potential market movements in the near term. The NSE introduced this index in 2003.

Defense stocks retreated as markets followed the election results trends. Hindustan Aeronautics fell 9.8%, Bharat Dynamics dropped 9.7%, Paras Defence and Space Technology declined 7%, Mazagon Dock Shipbuilders decreased by over 11%, ideaforge Technology fell 4.2%, Bharat Forge pulled back by over 5%, and Cochin Shipyard dropped 8.8%.