The stock market scattered like cards, I remember the corona period!

On the day of Election Result, there was such a tsunami in the stock market that BSE Sensex dives 6000 points, while NSE Nifty slipped more than 1900 points. After the Corona Pandemic, this has seen the biggest decline ever. Why was the outcry out a day before and the next day? There are many reasons behind this and four of them are prominent, let’s explain about it in detail…

Initial decline in the market changed in tsunami

First of all, let’s talk about the latest situation of the stock market, so the process of decline started with the market opening on Tuesday is not taking the name of stopping. The BSE Sensex was opened by 1700 points and by 12.20 pm, it fell by 6094 points to the level of 70,374. On the other hand, the Nifty Index was trading at the level of 21,316 with a drastic decline of around 1947 points. On the last trading day, the Sensex closed with a gain of 2500 points and the Nifty 733 points on Monday.

However, after this, fast recovery also appeared in the stock market. At 1.43 pm, the decline in the market reduced to below 4000 points and the decline in Nifty was reduced to 1200 points.

The biggest decline after Corona

Investors have suffered a big loss due to decline on Tuesday and according to BSE MCAP, they have lost assets worth about Rs 40 lakh crore. The special thing is that this major decline in the stock market is bigger than the decline during the outbreak of Korona epidemic in the country. At that time the Sensex was broken around 6 per cent and on Tuesday, Sensex 7.97 per cent, while Nifty 50 has fallen by 8.37 per cent.

First reason- Exit poll did not make a reality

Now let’s talk about the reasons behind the major decline in the stock market on Tuesday, so there are four main reasons, whose effect has appeared on the market. Among them, exit poll estimates are not the first to be converted into reality. In fact, in Exit Poll, the NDA government led by Prime Minister Narendra Modi (NDA Govt) had projected to get 361-401 seats, but NDA is seen winning 295 seats till the news is written on the result day. . In such a situation, after the release of the exit poll, the stormy boom in the market turned into a tsunami on the result of the result.

Second reason- BJP does not have an absolute majority!

The second reason for the decline in the stock market is also related to the election results. In fact, the estimates that were being expressed in the exit poll were being talked about getting a clear majority to the Bharatiya Janata Party (BJP). But when the votes started opening on Tuesday, it became clear till 12 noon that the BJP is not seen forming an absolute majority government in the country. Its impact was also seen as a decline on the stock market and the decline in the stock market moving forward also seemed to be steadily intensifying.

Third reason- Foreign investors rude

Foreign investors are constantly being seen in the Indian stock market and it is increasing continuously. You can guess this from the fact that foreign portfolio investors (FPI) have withdrawn Rs 25,586 crore from the Indian stock market in May. This figure was Rs 8700 crore in the previous month i.e. April 2024. The special thing here is that after nearly two decades, such a huge withdrawal has been done by FPI. According to NSDL data, in 2004, foreign investors withdrew Rs 3248 from Indian markets.

Fourth reason- Investors’ sentiment is impaired

Not being a reality of exit poll estimates, BJP would not get a clear majority and due to the indifference of foreign investors, the senses of investors who have invested in the stock market have been adversely affected. On Tuesday, there was a strong selling in the stock market and shares from Reliance to Tata, from Adani to SBI have been broken. There has been a big decline of 18 to 23 percent in these. The sentiments of investors can also be considered a reason for the decline in the Indian market.