PM Modi, Amit Shah’s bullish claims for Indian stock market shatter as Nifty 50 Sensex crash 8% on Election results 2024
- Stock market reaction starkly contrasts with the optimistic projections made by Prime Minister Narendra Modi and Union Home Minister Amit Shah last month.
The Indian stock market benchmark indices, Sensex and Nifty 50, crashed on Tuesday, June 4, as the early voting trends in Lok Sabha election results 2024 indicated the ruling BJP-led alliance might secure a slim majority, falling short of exit poll predictions.
Sensex and Nifty 50 cracked 8% each with the BSE-listed companies erasing market capitalisation of nearly ₹40 lakh crore. All the sectoral indices were trading with substantial losses, particularly public sector unit (PSU) stocks.
This market reaction starkly contrasts with the optimistic projections made by Prime Minister Narendra Modi and Union Home Minister Amit Shah last month. In interviews with various news channels, both leaders had predicted a robust market rally on June 4, coinciding with the announcement of the election results.
Forecasting a surge in the domestic stock market, Shah had even urged investors to consider purchasing stocks before June 4, the election results day. He projected that the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) would win over 400 seats, expecting a stable Modi government at the center, and consequently, a rising market.
However, the trends so far show NDA leading in less than 300 seats with the BJP alone strugglingf to cross the halfway mark of 272 seats.
“As the trends are emerging,the landslide victory as predicted by the exit polls does not seem to be happening.This is likely to make the government to have second thoughts on the difficult economic reforms and the same may not be as aggressive as earlier anticipated. However the emphasis may shift partly to ground level welfare schemes and employment generation,” said Jyoti Prakash Gadia, Managing Director at Resurgent India.
He believes overall growth trajectory may however remain stable with emphasis on infrastructure development which may emerge as a consensus strategy in the long run.
At 12:25 pm, the Sensex plunged 5,157.44 points, or 6.74%, at 71,311.34, while the Nifty 50 crashed 1,638.05 points, or 7.04%, to 21,625.85.
Sensex and Nifty are set for biggest single-day fall in more than 2 years, with the benchmark Nifty 50 slipping below 22,000 level.
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