June 4th 2024.
Stock prices of public sector enterprises and state-owned banks experienced a sharp decline of up to 24% on Tuesday as the vote counting trends revealed that the BJP may not secure a clear majority in the Lok Sabha polls. This resulted in the Nifty PSE Indices dropping by 16.38% to close at 9,475.10. Some of the worst hit were companies like REC, whose share price tumbled by 24.07%, and PFC, which saw a decline of 21.62%. Other major players like Container Corp of India, Bharat Electronics Ltd, ONGC, Coal India, NTPC, and Power Grid also saw significant drops ranging from 11.98% to 19.43%.
The Nifty PSU Bank Index also witnessed a plunge of 15.14%, causing a decline of 1,211.90 points. This was reflected in the share prices of Union Bank, Bank of Baroda, Punjab National Bank, Canara Bank, and State Bank of India, which all saw drops ranging from 13.37% to 17.65%. In fact, SBI's share price went as low as 19.17% during the day, causing a market valuation loss of Rs 1.08 lakh crore.
The Nifty Bank Index also saw a significant decline of 7.95%, with an intra-day low of 9.61%. This was the biggest fall since February 2022. The overall market sentiment was dampened by the disappointing results for the BJP-led NDA in the Lok Sabha elections, as they appear to be losing heavily in their strongholds of Uttar Pradesh, Haryana, and Rajasthan. However, it is expected that they will still form the government with approximately 290 seats.
The uncertainty surrounding the new government's approach to their agenda may have caused initial apprehension in the market, leading to a decline in stock prices. However, experts like Vikram Kasat, Head of Advisory at Prabhudas Lilladher, believe that this may just be a temporary setback. He predicts that PSU stocks will regain momentum and return to the limelight in the near future. He also believes that once the new government settles in and starts implementing their policies, there is potential for significant positive developments.
In conclusion, while the initial market reaction to the election results may be negative, things could turn around quickly. The speed of social reforms may be affected in the short term, but there is potential for significant positive developments in the long run. Only time will tell how the new government will approach their agenda and how it will impact the market. As for now, the situation remains uncertain, but there is hope for a brighter future.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
