New Delhi: The stock market faced a significant downturn on Tuesday as the Bharatiya Janata Party (BJP) struggled to secure a decisive lead in the ongoing national election results.
By 11 AM, it has become clear that BJP on its own is unlikely to cross the half way mark, although it is certain that with allies NDA will form the government at the centre.
The idea of a coalition government lead by BJP at the centre has led to widespread market anxiety and a sharp decline in stock indices.
Since the opening of trading on Tuesday, investor sentiment has been notably bearish.
The Bombay Stock Exchange's benchmark Sensex plummeted by 3905.15 points. Similarly, the Nifty 50 index suffered a substantial drop, falling 1061.05 points at 11 am
The decline in stocks was widespread, affecting various sectors including banking, automotive, and technology. Major companies like Reliance Industries, HDFC Bank, and Infosys saw significant drops in their share prices, contributing to the overall market downturn.
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Shares of Bank of Baroda, PNB, SBI, IndusInd Bank, Bandhan Bank, Axis Bank among others slipped up to 9 percent, as against 5 percent decline in the Bank Nifty index.
Market analysts attribute the steep decline to political uncertainty. The BJP, which has been the dominant force in Indian politics for the past decade, is seen as a pro-Industry party whose policies have generally favoured economic growth and market stability.
The failure to secure a clear majority to BJP of its own raises concerns about the formation of a stable government and the continuation of economic reforms.
Sunil Shah, market expert said, "Yesterday market acted on the outcome of exit polls. The early trends are showing that the gap or the lead is not that big so the market is reacting to that. The market will remain volatile throughout the day."
In addition to political uncertainty, global market trends and domestic economic indicators have also played a role in the current market volatility.
Rising oil prices, inflation concerns, and recent global economic slowdowns have compounded the impact of election jitters on investor sentiment.
As the day progresses, the market will remain focussed on the final tally and the BJP lead NDA's final majority figure.
—ANI