Stock markets crash, Adani stocks plunge as INDIA bloc gains ground in early trends

The stock market was in turmoil on Tuesday morning (June 4) as early trends for the Lok Sabha elections suggested INDIA bloc gaining ground over its 2019 tally.

The Sensex, a key indicator of the market's performance, plummeted by a staggering 2,700 points within the first 90 minutes of counting. This sudden and drastic drop clearly reflected the market's anxiety and uncertainty regarding the election outcome.

Adani Enterprises shares also took a significant hit as the counting progressed, plummeting by over 5 per cent. This unexpected downturn caught many investors off guard, leaving them scrambling to adjust their portfolios.

By around 10 am, the Nifty had already dipped by 2.31 per cent, losing 536.25 points. The index struggled to stay above the 22,400 mark but ultimately succumbed to the pressure, dipping below it as the day wore on.

Impact on rupee too

The rupee also felt the impact of the market's volatility, falling by 24 paise to 83.38 against the US dollar in early trade. This decline was a clear indication of the market's growing unease and lack of confidence in the Indian economy.

The Sensex, which had been steadily rising in the days before the elections, suddenly nosedived by 2,100 points, dragging the Nifty below the 22,700 mark. This dramatic drop was a stark reminder of the market's sensitivity to political developments and the uncertainty surrounding the elections.

As the day wore on, investors grew increasingly anxious, with many opting to take a cautious approach and liquidate their positions. The market's volatility clearly indicated the uncertainty surrounding the elections and the potential impact they could have on the Indian economy.

'Growth story still intact'

However, despite the market's turmoil, many analysts have remained steadfast in their optimism about the Indian economy's long-term prospects. They reiterated that the country's growth story was still intact and that the elections would ultimately have a limited impact on the market's performance.

On Monday, the day before the counting began, the Sensex surged over 2,500 points or 3.3 per cent to close at a record high of 76,468.8. This was driven by exit polls predicting a victory for Prime Minister Narendra Modi's government. The Nifty also gained over 2.7 per cent to close at 23,148.05.

However, in the five trading sessions prior to June 3, the Nifty had declined by nearly 2 per cent due to uncertainty surrounding the BJP's performance in the elections and foreign investors building bearish positions. The strong Q1 GDP growth of 7.8 per cent year-on-year, as well as S&P's upward revision of India's rating outlook, provided fundamental support to the market.