Sensex on a freefall; Adani stocks market value down by Rs 3 lakh crore

Sensex on a freefall; Adani stocks market value down by Rs 3 lakh croreThe Sensex is witnessing a freefall. The index nosedived over 6,100 points to record the biggest intra-day fall in the last two years. The Nifty was trading at 21,818 points, with a drop of 1,445.30 points, or 6.21 per cent.

Adani Group firms’ shares tumbled

Among individual companies, 10 Adani Group firms' shares tumbled. Adani Ports stock plummeted by 20 per cent on Tuesday (June 4) as the counting of ballots for the Lok Sabha elections revealed that the ruling NDA alliance may not win as many seats as predicted in the exit polls. Ambuja Cements, Adani Enterprises, Adani Energy Solutions, Adani Green, NDTV, ACC, Adani Total Gas, and Adani Gas all experienced share price drops ranging from 18 per cent to 12 per cent.

The total market value of all 10 Adani equities decreased by around ₹3 lakh crore. Adani stocks were among the top gainers in yesterday's session, as exit polls suggested that PM Narendra Modi would win a landslide victory in the elections with more than 350 seats. Following the rebound, Adani stocks erased all Hindenburg-era losses, with market capitalisation approaching ₹20 lakh crore after a 16-month hiatus.

Index heavyweights like the Reliance Industries share price also declined more than 8 per cent.

Bloodbath in the market

The stock market is experiencing a bloodbath, with the Nifty seeing its biggest single-day fall since February 2022 during early-morning trading. The BSE-listed companies saw a market cap erosion of ₹40 lakh crore.

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 reflected the market's anxiety and uncertainty regarding the election outcome.

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 succumbed to the pressure, dipping below it as the day wore on.

Rupee also falls

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.

As the day progressed, investors became increasingly apprehensive, with many choosing to adopt a cautious approach and liquidate their positions. The market's volatility was a clear sign of the uncertainty surrounding the elections and their potential impact on the Indian economy.

Analysts remain optimistic about economy

Despite the market's turbulence, many analysts have maintained optimism about the Indian economy's long-term prospects. They reiterated that the country's growth narrative was still intact and that the elections would ultimately have a limited impact on the market's performance.

On Monday (June 3), 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 PM 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 before 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 and S&P's upward revision of India's rating outlook provided fundamental support to the market.