New Delhi: Stock markets closed trading on Tuesday — the counting day for the 2024 general elections — significantly down after it became evident that the Bharatiya Janata Party (BJP) would fall well short of a single-party majority.
The Sensex ended the day’s trade slipped 4,390 points or 5.7 percent while the Nifty was down 1,379 points or 5.9 percent. The main losers were public sector companies and those related to the government’s capital expenditure and infrastructure push. The gainers largely included stocks of fast-moving consumer goods.
Tuesday’s fall reverses the gains the stock indices saw on Monday, when stocks rallied more than 3 percent in response to exit poll results that predicted a single-party majority for the BJP and increased numbers for the NDA.
Head of research at Geojit Financial Services Vinod Nair said: “The unexpected outcome of the general election sparked a wave of fear selling in the domestic market, reversing the recent substantial rally.”
Nair added the provisional results Tuesday would “lead to a major shift in political policy with a focus on social economics”, which, he said, would positively impact the rural economy.
Research and investment advisory firm Emkay Global also advised investors to “stay away” from PSU and capital goods stocks and instead focus on FMCG stocks.
“PSUs and capital goods are the most vulnerable sectors, from which we will stay away for the time being,” Emkay Global said in a report. “On the other hand, consumption should come back and we see FMCG and value retailers making a strong return.”
This trend was seen playing out in the markets on Tuesday. Three of the only five gainers in the Sensex were FMCG companies Hindustan Unilever, Nestle India, and Asian Paints. The BSE FMCG index ended higher, one of the few indices to do so.
On the flip side, the BSE CPSE index, which tracks the listed public sector companies, ended the day down 15.6 percent. The 30 stocks in this index saw their prices fall between 13 to 23 percent.
Similarly, the BSE India Infrastructure Index was down 15.1 percent, with the biggest losers being Rural Electrification Corporation (-25 percent), Power Finance Corporation (-23 percent), Adani Ports & SEZ (-21.3 percent), and Adani Energy Solutions (-20 percent).
The third category of stocks that saw prices plummet was those companies perceived to be close to the Modi government. The Adani Group saw Rs 3.6 lakh crore wiped out from its market capitalisation following a 10 to 21 percent fall in stocks of its various listed companies.
Mukesh Ambani-owned Reliance Industries saw a 7.5 percent fall in its stock price.
(Edited by Tikli Basu)
Also read: Adani Group sees Rs 3.6 lakh cr wiped out from market cap on counting day as BJP faces poll setback