Stock Market Crash : Market Plunges as NDA Fails to Meet Election Expectations
The Indian stock market experienced a significant crash on Tuesday after the National Democratic Alliance (NDA) failed to secure the expected gains in the general elections. The BSE Sensex plummeted by 4,389.73 points, closing at 72,079.05, while the national index Nifty lost 1,379.4 points, reaching 21,884.50. The Nifty50 also fell by eight percent to 46,928.60, marking their worst performance in four years. The disparity between the BJP’s actual performance and the exit polls’ predictions caused considerable anxiety among investors, resulting in the worst market fall in recent years.
At one point on Tuesday, the Sensex dropped nearly 6,200 points as the INDIA alliance surpassed the NDA, causing further turmoil in the market. However, the market showed signs of recovery once it became apparent that the Modi government would return to power, albeit with a slim majority. This partial recovery, though, did little to alleviate the overall investor anxiety. Key shares, including those of NTPC, SBI, Power Grid, L&T, IndusInd Bank, Tata Steel, Reliance Industries, ICICI Bank, Axis Bank, and Airtel, saw declines of up to 15 percent, while small and medium stocks fell by eight percent.
The previous day, Indian stocks had reached a record high, buoyed by exit polls predicting Prime Minister Modi’s return with over 350 seats. Both foreign funds and domestic investors were optimistic about new labor reforms under the Modi 3.0 government, hoping for accelerated economic reforms that would position India as a global power. However, by Tuesday noon, the realization that the BJP would not have a clear majority to implement reforms as freely as before led to widespread panic among investors.
