Stock market today: Nifty 50 falls to over 2-month low as possibility of no majority for BJP haunts investors

Stock market today: The Indian stock market witnessed an all-around sharp selloff on Tuesday. Experts pointed out that a slim majority for NDA may trigger short-term uncertainty on the policy front.

Nishant Kumar
Updated4 Jun 2024, 05:12 PM IST
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Stock market today: Nifty 50 cracked nearly 6 per cent to close at 21,884.50 on Tuesday.
Stock market today: Nifty 50 cracked nearly 6 per cent to close at 21,884.50 on Tuesday.(Agencies)

Stock market today: Early trends of election results, which showed that the Bharatiya Janata Party (BJP) may not be able to secure a clear majority on its own, and the BJP-led NDA may not be able to secure a strong majority, unlikely projected by a majority of exit polls, rattled investors as market benchmark Nifty 50 cracked 5.93 per cent to close at 21,884.50 on Tuesday, June 4, its lowest since March 20 this year.

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. The index ended with a cut of 1,379 points, or 5.93 per cent, at 21,884.50.

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. The Sensex finally closed with a massive loss of 4,390 points, or 5.74 per cent, at 72,079.05.

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The massive selloff made investors poorer by nearly 31 lakh crore in a single session as the overall market capitalisation (mcap) of companies listed on the BSE plummeted to nearly 395 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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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, 05:12 PM IST
HomeMarketsStock MarketsStock market today: Nifty 50 falls to over 2-month low as possibility of no majority for BJP haunts investors

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