Share market today: India VIX soars over 40% as market frets over the prospects of slim margin of BJP-led NDA

  • Stock market today: Sensex and Nifty 50 witness steep fall as NDA leads below 300. Exit polls predicted 350–370 seats for NDA, but real counting shows different mood. Markets not liking unclear mandate. India VIX up 39-44%, markets in worst decline in four years.

Dhanya Nagasundaram
Published4 Jun 2024, 01:09 PM IST
The India VIX today is trading in the range of 29-30, up over 39-44%. (Image: Pixabay)
The India VIX today is trading in the range of 29-30, up over 39-44%. (Image: Pixabay)

Stock market today: The domestic benchmark indices, Sensex and Nifty 50, has witnessed a steep fall on Tuesday session (June 4) as leads for National Democratic Alliance (NDA) are presently below 300. According to exit polls, the BJP-led NDA, which is currently in power, was predicted to win 350–370 seats in the general election of 2024, well above predictions. Although this prediction matched the consensus estimate, it was less than the alliance's 400+ aim and about equal to the 353 seats gained in 2019.

Overall, markets are not liking the counting, which does not give a clear mandate to the NDA. The exit poll and real counting are showing very different moods. There is neck-to-neck competition, which can make the opposition stronger.

Also Read: Election Results 2024 Sensex Crash Live Updates: Bloodbath on Dalal St. as Sensex falls 4,600pts, Nifty down 6.2%

BSE-listed companies erased market-cap of nearly 40 lakh crore. The Sensex fell below 72,000 and the Nifty 50 fell below the 21,200 mark, falling by around 7% each. As a result of which, the fear gauge index, the India VIX today is trading in the range of 29-30, up over 39-44%.

“Uncertainty over the actual outcome of election results compared to exit polls is leading to panic amongst market participants. This has led to a rise in India VIX as demand for out-of-money options seems to be on the rise to hedge long positions and portfolios. 30-35 is the crucial range,” said Ruchit Jain, Lead Research Analyst at 5paisa.

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

Except for the COVID-19 corRECtion, India VIX has topped the 30-35 range in May 2019 and February 2022. On 13 March 2020, India VIX went up from 41.16 to 59.48, which is 44%. 

Market experts highlighted that the market will continue for some time as volatility is very high due to the negative surprise in the election results.

All sectoral indices were trading in red, marking the worst decline in the market in four years. PSU stocks have suffered greatly, with sectoral indexes falling by almost 15%. Out of the top losers in defence, BEL and HAL dropped by more than 18%.

Also Read: Election results: Markets crack 5%! Is today's fall an opportunity for long-term investors? Experts advise strategy

Motilal Oswal's Raamdeo Agrawal in an interview on CNBC-TV18 said that this is a classic risk of investing in the equity markets. So, very clearly, the risk was not visible for quite some time in the last three or four years. It was looking as if there was no risk in the market. So now this deep cut is coming in. And this is because the expectations set were at a very different level altogether in terms of a very large majority for the BJP itself, and we're talking about closer to three 360-70 seats for the NDA. So, there is a huge gap, and I think, okay, whatever it is, they can make up for it in the final tally. But it can be either in the sense that, in the final tally, currently the trends are bad.

Agrawal added that it's quite a shocking mandate. It is a kind of fractured mandate. There is no majority for every party. But the good thing is that we have our NDA coalition claiming that the government and BJP are going to be the largest party with 40 to 50 seats, maybe one to 250 seats or more. So I think on the whole, no, everything is not lost. But I think there is a big loss in the political dialogue.

Also Read: Multibagger PSU stocks including PFC, REC, RVNL fall up to 20%; Nifty PSE index hits 2-month low

Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.

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First Published:4 Jun 2024, 01:09 PM IST
HomeMarketsStock MarketsShare market today: India VIX soars over 40% as market frets over the prospects of slim margin of BJP-led NDA

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