Sensex crashes 4,390 points, Nifty tumbles below 22,000 as NDA gets narrower majority

The Indian equity benchmarks witnessed their worst day since the onset of Coronavirus pandemic after Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) failed to cross majority mark of 272 although its National Democratic Alliance (NDA) was set to form the government but with a narrower majority eroding confidence of market participants who were expecting the BJP to improve upon its previous tally of 303.

Markets went into tailspin with Sensex dropping as much as 6,234.35 points or 8.15 per cent to hit intraday low of 70,234 and Nifty crashed as much as 1,982 points or 8.52 per cent to hit an intraday low of 21,281.45.

The Sensex crashed 4,390 points or 5.74 per cent to close at 72,079 and Nifty 50 index dropped 1,379 points or 5.93 per cent to settle at 21,884.

NDA was leading on a majority of seats. However, these numbers significantly deviated from the landslide victory anticipated in exit polls.

BJP appeared to be lacking a majority on its own in the 543-member parliament, according to the trends.  BJP-led NDA was ahead on 296 seats and opposition INDIA alliance led by Congress was gaining on 230 seats.

Markets were very highly volatile during the session as market experts expect that incoming government will face difficult challenge from the opposition to pass laws concerning economic reforms and the government may shift its focus on populism to lure support base, analysts said.

Selling pressure was so intense that all sector gauges barring the measure of FMCG shares ended with deep cuts. PSU Banking shares were worst hit during the session as the Nifty PSU Bank index tumbled 15 per cent. Nifty Oil & Gas, Metal, Bank, Financial Services and Realty indices also dropped between 6-12 per cent.

Mid- and small-cap shares also came under heavy selling pressure with Nifty Smallcap 100 index dropping 8.23 per cent and Nifty Midcap 100 index collapsing 7.88 per cent.

Adani Ports with 21 per cent fall was the top Nifty loser. Adani Enterprises (down 19 per cent), ONGC (down 16.23 per cent), NTPC (down 14.52 per cent), Coal India (down 13.54 per cent), State Bank of India (down 13.37 per cent) and Larsen & Toubro (down 12.37 per cent) were also among the losers.

On the flipside, Hindustan Unilever, Britannia Industries, Nestle India, Hero MotoCorp, Tata Consumer Products and Cipla were among the gainers.

The overall market breadth was extremely negative as 3,349 shares ended lower while 488 ended higher on the BSE.