Stock market today: Nifty 50 falls to over 4-month low as possibility of no majority for BJP haunts investors

Nifty 50 opened at 23,179.50 against its previous close of 23,263.90 and fell 8.5 per cent to hit its intraday low of 21,281.45. On the other hand, the Sensex opened at 76,285.78 against its previous close of 76,468.78 and cracked 8.2 per cent to the level of 70,234.43.

Around 12:50 pm, the Sensex was 5.75 per cent down at 72,072.62, while the Nifty 50 was 6 per cent down at 21,865.70.

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The massive selloff made investors poorer by nearly ₹38 lakh crore in a single session as the overall market capitalisation (mcap) of companies listed on the BSE plummeted to nearly ₹388 lakh crore in intraday trade from nearly ₹426 lakh crore at the previous session’s close.

Also Read: Stock market today: Investors lose ₹38 lakh crore as election race gets tighter than what exit polls predicted

Why are investors nervous?

Experts pointed out that a slim majority for NDA may trigger short-term uncertainty on the policy front. However, the overall outlook for the Indian stock market may not drastically change.

“Investors should adopt a cautious approach if the NDA secures a slim margin in the 2024 Lok Sabha elections. While a narrow victory for the NDA may initially lead to market volatility due to uncertainty surrounding policy continuity and implementation, the overall outlook for the Indian stock market may not drastically change,” said Atul Parakh, CEO of Bigul.

Also Read: Why is Indian stock market falling today? — explained

“Investors should focus on maintaining a diversified portfolio with exposure to defensive sectors and companies less dependent on government policies. Additionally, they should closely monitor any developments in economic reforms and stimulus packages proposed by the new government to gauge their potential impact on specific industries,” said Parakh.

Rupak De, a senior technical analyst at LKP Securities pointed out that the market, which had begun to price in a landslide victory for the NDA, is witnessing a significant correction due to margin calls, as retail investors were carrying heavily leveraged positions.

“Support seems to be very fragile. 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 election comfortably,” said De.

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Published: 04 Jun 2024, 12:44 PM IST