The Nifty PSE index experienced a significant decline of over ten percent in trading on June 4, reflecting the market’s reaction to the less favorable outcome for the Narendra Modi-led National Democratic Alliance.
Previously, market experts had anticipated political and policy continuity, as suggested by exit polls, which would have likely resulted in continued outperformance of public-sector shares.
“The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday. If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market,” explained V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The Nifty PSE index plummeted over 10 percent, with all its constituents trading deeply in the red. Stocks like SAIL, GAIL, Coal India, Power Grid, ONGC, and Container Corporation of India experienced around a 10 percent decline each.
BHEL, REC, PFC, and Bharat Electricals saw a significant drop of 15 percent, with trading temporarily halted in these stocks.
Brokerages believed that if the NDA coalition returns to power with a large majority, the government would likely continue its economic agenda of development, growth, liberalization, and focus on investment-led growth during its third consecutive term in power.
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