As the counting of votes for the Lok Sabha elections reached a crucial stage, the Indian stock market witnessed a dramatic downturn on Tuesday, sending shockwaves across investors and analysts alike.
The market’s response to the unfolding political landscape was swift and severe, with all sectoral indices, particularly those linked to public sector undertakings (PSUs), trading deeply in the red.
The benchmark index, Sensex, bore the brunt of the sell-off, plummeting nearly 6,000 points, approximately 8 percent, to touch 70,397, while the broader Nifty index suffered an even steeper decline of 8.5 percent, shedding nearly 2,000 points to reach 21,329 by 12:30 PM.
The collective market capitalization of BSE-listed companies witnessed a staggering erosion of around Rs 44 lakh crore of investors’ wealth on Tuesday alone.
The intensity of the downturn was reflected across various sectors, with the BSE Capital Goods index experiencing a near-10% nosedive.
This sharp decline came in the wake of early election trends indicating a potential setback for the ruling BJP-led National Democratic Alliance (NDA).
The market turmoil began early in the trading session, with the Sensex registering a steep fall of 2,713 points, or 3.55 percent, while the Nifty followed suit, plunging by 838 points, or 3.65 percent.
Adding to the volatility, the India Volatility Index (India VIX) surged by 44 percent, reaching 33.33 points, underlining the prevailing nervousness among investors.
This downturn marks a stark reversal from Monday’s buoyant trading session, where the Sensex had soared by 2,507 points, or 3.39 percent, to close at 76,468, and the Nifty had surged by 733 points, or 3.25 percent, ending the day at 23,263.
These gains had come in response to optimistic exit poll projections favoring a comfortable victory for the BJP-led NDA in the Lok Sabha elections.
However, the sudden turn of events has injected a considerable degree of uncertainty into the market, as investors grapple with the evolving political landscape and its potential implications for the economy and corporate sector.
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