Stock market crash: NDA's dismal show creates panic among investors

KOCHI: The Indian stock market crashed on Tuesday after the National Democratic Alliance(NDA) failed to make the expected gains in the general elections. BSE Sensex lost 4,389.73 points to reach 72,079.05 while the national index Nifty lost 1,379.4 points to touch 21,884.50. Nifty50 fell eight per cent to 46,928.60, their worst in four years. The fact that the BJP could not perform as per the exit polls' predictions made the investors nervous. Tuesday’s crash in the stock market is the worst fall in the last four years.

At one point on Tuesday, the Sensex plunged close to 6,200 points after the INDIA alliance jumped ahead of NDA with the majority, creating ripples in the market. The market soon improved after it was evident that the Modi government would return to power with a thin majority.

Shares of NTPC, SBI, Power Grid, L&T, Indus Ind Bank, Tata Steel, Reliance Industries, ICICI Bank, Axis Bank, and Airtel witnessed a decline of up to 15 per cent. The price of small and medium stocks fell by 8 per cent on Tuesday.

On Monday, the Indian stocks hit a record high after the exit polls predicted PM Modi’s return with more than 350 seats. Foreign funds and domestic investors earlier hoped for new labour reforms from the Modi 3.0 government to speed up economic reforms and transform India into a global power. However, by Tuesday noon, it was clear that the BJP would lack a clear majority to bring reforms at a whim like in their earlier years, instilling panic among the investors.