The Indian stock market took a severe hit on June 4, with Sensex and Nifty 50 each dropping by 8%. This sharp decline came as early voting trends for the 2024 Lok Sabha elections suggested that the BJP-led alliance might only achieve a slim majority, missing exit poll forecasts.
The crash wiped out nearly ₹40 lakh crore in market value for BSE-listed companies, with all sector indices, especially public sector unit (PSU) stocks, experiencing significant losses.
This downturn starkly contrasts with the optimistic forecasts made by Prime Minister Narendra Modi and Home Minister Amit Shah. Both leaders had predicted a strong market rally following the election results. Shah had even encouraged investors to buy stocks before June 4, expecting the BJP-led National Democratic Alliance (NDA) to secure over 400 seats and ensure a stable Modi government.
However, current trends show the NDA leading in fewer than 300 seats, with the BJP struggling to reach the 272-seat majority mark.
“With the expected landslide victory not materializing, the government may reconsider aggressive economic reforms and focus more on welfare schemes and job creation,” said Jyoti Prakash Gadia, Managing Director at Resurgent India. He noted that while growth may stay stable, infrastructure development might become a key strategy.
By 12:25 PM, the Sensex had dropped 5,157.44 points (6.74%) to 71,311.34, and the Nifty 50 fell 1,638.05 points (7.04%) to 21,625.85, marking the biggest single-day fall in over two years, with the Nifty 50 slipping below the 22,000 level.
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