Indian Stock Market Update: On the morning of June 5th, BSE Sensex and Nifty50 opened in green. The least expected result turnout of the Lok Sabha Elections sent shock waves across Dalal Street, where people drooped down to bloodshed as Modi-led NDA did not stand up to the expectations of people and exit-poll predictions on Tuesday. Both Sensex and Nifty ended the day at almost 6% down in the red, and the stock market in India witnessed its worst day in four years. It is the worst drop ever since the Covid-19 pandemic lockdown as lower than expected Lok Sabha seats for the Bharatiya Janata Party will restrict their decision-making capacity in the upcoming future.
Why did the stock market crash?
The Worst day for the Indian Stock Market in 4 years has led the companies to burn out due to the fallen elections. Contrary to the exit poll predictions, the Bharatiya Janata Party is 31 seats short of the majority mark. Quite the irony to their leaders who believe these elections would be historic as BJP would attain their goal of “400- pair. Now, the party ruling for 2 terms, which is more than 10 years, has to rely on allies like TDP and JD (U). The investors are in double minds as it would shift the pattern, as bold policy-making decisions to sustain the economy of the country now hang in the trajectory of a collation government.
Why are the investors unhappy?
The narrow win of the Bharatiya Janata Party has sent the stock market tumbling. The NSE Nifty 50 and the BSE Sensex indices closed at 5.93 per cent and 5.74 per cent, respectively, after falling 8.5 per cent earlier on the election results day. Investors have been overwhelmingly favourable towards the Modi-led government and their economic agenda in his decade-long tenure. Modi’s pledge to transform India into a developed nation by 2047 has facilitated massive investment in infrastructure and has championed domestic manufacturing, inviting record Foreign Investments to root out corruption. The Nifty has almost tripled in Modi’s watch and earlier this year, India’s stock market capitalisation valued $4.3 trillion made it the fourth largest market.
How did the economy perform during the last Modi-led decade?
The Gross Domestic Product has grown by 8.2 per cent in the fiscal year ending in April, which has outpaced most of the developed and developing countries. Over the last decade, the GDP per capita has risen from about $5,000 to more than $7,500. In the past decade, India has gone from being the ninth-largest economy in the world to becoming the fifth-largest economy. While ground reports suggest that Modi will be taking over the office for the third consecutive time, his ways are speculated to compromise because of the collation government in making due to the disability of BJP in securing a complete majority.
What happened in the stock market on June 4th?
Investors lost over 30 trillion rupees; there are 12 zeros in a trillion in one single day as the markets crashed and how during the counting of votes. All industries bear losses except the FMCG companies, which were still in the green. BSE-listed firms’ market capital dropped below 400 lakh crore as companies faced burnout.
The stock market bubble seems to have busted and has taken down several companies and traders together. Modi and the ministers of NDA had earlier boasted about the upsurge that would take place in the stock market after the election results. The tables have turned and how. However, the markets will rise again and the economy will bounce back stronger than before, that is for sure. The question is, which government will steal this credit?
