The Indian stock markets experienced a significant plunge, with the Sensex dropping over 2,700 points and the Nifty falling more than 800 points during early trading on Tuesday. This dramatic decline followed Monday’s surge, which was driven by exit polls suggesting a return of the incumbent government. However, early trends indicated a tight contest, leading to market volatility.
The rupee and bonds mirrored the market’s anxiety regarding the election results, which pointed to a close tussle. The rupee declined by 0.3%, reaching ₹83.39 against the dollar. Additionally, the 10-Year Bond Yield rose by 9 basis points, indicating investor nervousness.
One of the most affected sectors was the Public Sector Undertakings (PSU) stocks. The NIFTY PSU Bank index plummeted by more than 15%. A total of 56 PSU stocks were impacted, with the top 10 experiencing significant losses.
| Company Name | Last Price | Change | % Loss | |
| 1 | Bharat Electronics Ltd | 250.65 | -68 | -21.34 |
| 2 | Power Finance | 441.15 | -113.75 | -20.5 |
| 3 | REC | 487.65 | -116.9 | -19.34 |
| 4 | BHEL | 252.4 | -58.95 | -18.93 |
| 5 | Container Corp | 956.5 | -217.1 | -18.5 |
| 6 | NALCO | 161.7 | -34.45 | -17.56 |
| 7 | Hind Copper | 305.45 | -64.95 | -17.54 |
| 8 | HUDCO | 238 | -49 | -17.07 |
| 9 | Union Bank | 141.15 | -28.85 | -16.97 |
| 10 | SAIL | 138.5 | -27.7 | -16.67 |
The sharp decline in PSU stocks underscores market concerns regarding the current government’s performance in these elections. A narrow win would result in a slowdown of key reforms. The extent of the government’s victory will significantly influence its ability to implement aggressive reforms in land, labor, market, and capital sectors, thereby impacting investor sentiment and market stability.
The recent market turbulence reflects investor apprehension about the political landscape and its implications for economic reforms. The performance of PSU stocks, in particular, indicates a cautious outlook. Moving forward, the magnitude of the government’s win will play a crucial role in shaping market confidence and the pace of economic reforms.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Jun 4, 2024, 6:37 PM IST
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