Stock Markets React Strongly To NDAs Poor Performance
Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack
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By Sunil Garodia
First publised on 2024-06-04 14:03:06
About the Author
Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack
View all posts by this Author
From the
highest single day gain to the highest single day loss in 24 hours, the stock
markets witnessed a flip-flop of epic proportions mirroring the glee on exit
poll predictions and the gloom of the actual results. While the Sensex had
jumped by nearly 2800 points intra-day on Monday in the exit polls-led
euphoria, it slid 6235 points intra-day on Tuesday as the trends started coming
in and showed that BJP was suffering losses almost everywhere before recovering
by nearly 2000 points in closing trades to end at 72079. The Nifty also
followed the same pattern. It went down a record 1982 points intra-day but
recovered to close at 21884 or 1379 points lower. Both the indices fell more
than 5% in the bloodbath following the results.
The biggest
reason for the massacre and the return of the bears was that the BJP failed to
get a simple majority on its own, which means that it will be overly dependent
on unreliable partners to provide a stable government. The market feels that it
will be boxed in and will not be able to carry out necessary reforms which it
could have if it had got a majority on its own. Also, the wafer thin majority
for the NDA and the excellent performance by the INDIA bloc has also raised
doubts whether the NDA will be able to last 5 years. At one time during the
counting process, it seemed that the country was headed towards a hung
parliament and panic set in. But later, the NDA was able to secure a simple
majority and a semblance of sanity returned to the market.
These are
choppy times. Some shares have fallen too much and maybe it is the ideal time
to buy them. Those investors who booked profits in closing trades on Monday,
when the indices were at their peak, must look to invest again at the lower
prices. The markets will recover - but it will take time. It is a big shock for
the market to see the NDA slip from the expected 370-380 seats to under 300
seats. Although there is no immediate risk that policy continuity will be
affected, the situation has become fluid and the markets will wait and watch
before moving ahead.
