Every five years, the politics of India sways the stock market of the country, as the nation goes to the polls. Investors usually take this opportunity to evaluate how the outcome will have a bearing on their portfolios. In that respect, the most anticipated event of recent months is now firmly behind us as the election results are out.
The people have given their mandate in favour of the Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) for the third consecutive term. However, unlike the past two terms, where the BJP had secured a majority on its own, this time the situation is different.
BJP could not reach the majority mark of 272 seats in Lok Sabha on its own. The NDA secured a total of 291 seats, with the BJP winning just 240 seats against 303 in the previous election. The fall in the number of seats that BJP secured was against market expectations.
The Initial Jolt
On June 1, 2024, most pollsters had predicted a strong win for the BJP-led NDA in the 2024 general elections. On the back of this prediction, on June 3, the major Indian stock market indices, the BSE Sensex and Nifty, scaled new highs. The Sensex touched 76,468 points, while the Nifty was at 23,263, up by 3.30 per cent and 3.25 per cent, respectively. That day, the Sensex closed above the 76,000-mark for the first time in its history.
The very next day, though, on June 4, the day the results were announced, the situation changed dramatically.
As the result trends began to trickle in, the stock market started to crumble, and by the end of the day, both the Sensex and the Nifty had fallen by around 6 per cent.
The fall was much sharper in the mid- and small-cap indices, which fell by as much as 8-9 per cent. The sectoral indices, such as Nifty PSU Bank and Nifty Oil & Gas shaved off 15 and 12 per cent, respectively.
This story is from the July 2024 edition of Outlook Money.
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This story is from the July 2024 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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