Sensex Plunges as Election Results Stir Market Anxiety

Mumbai: In the wake of India's highly anticipated election results, the Sensex and Nifty indexes experienced a staggering downturn, marking their most significant fall since March 2020. The adverse market reaction ensued after exit polls suggested a commanding two-thirds majority for the BJP-led alliance in the lower house of parliament.

Anand James, Chief Market Strategist at Geojit Financial, remarked on the market's reaction, stating that any deviation from the extreme projections of exit polls was perceived negatively by investors. Despite the resounding victory forecasted for the ruling party, market volatility remained elevated, indicating apprehension among investors.

The market's decline was widespread, with all sectors witnessing losses. Bank stocks plummeted by 7.8 percent, realty and infrastructure sectors dropped by 9.1 percent and 10.5percent , respectively, while oil and gas stocks suffered an 11.7 percent decline. State-run companies and banks were hit the hardest, retreating by 17 percent and 16 percent, respectively.

Commenting on the market sentiment, Mayuresh Joshi, Head of Equity Research India at William O’Neil and Company, expressed concerns about the market's expectations and the potential for further disappointment. He emphasised the need to shift focus towards policy announcements and reforms amidst the unfolding political landscape.

Meanwhile, Asian share markets retreated as investors awaited India's official election results, with concerns mounting over the U.S. economy's manufacturing activity weakening. In early European trades, futures indicated a downward trend, while U.S. stock futures showed marginal gains.

Notably, Adani Enterprises and Adani Ports emerged as top losers in the Nifty 50 index, each experiencing a 19 percent decline. Other Adani group stocks also registered significant losses ranging between 9 percent and 19 percent.

The yield on benchmark 10-year Treasury notes in the U.S. saw a slight increase, while crude oil prices dipped following OPEC's decision to unwind production cuts. These developments underscored the global market's apprehension amid evolving political and economic dynamics.

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