Nifty, Sensex Fall As Much As 8%, Volatility Gauge Surges 51% Amid Vote Counting | Midday Market Update

Indian equity indices, the Nifty and the Sensex, plummeted over 8% on Tuesday, as poll trends indicate a closer than anticipated fight for the incumbent Narendra Modi government.

At 1:23 p.m., the S&P BSE Sensex fell 3,696 points, or 4.83% to 72,772, while the NSE Nifty 50 was trading 1,147 points, or 4.93% lower at 22,116.5. Intraday, Nifty fell as much as 8.52% to 21,281.4, the highest intraday fall since March 23, 2020, while Sensex declined 8.15% to 70,234.4.

During the session, the Nifty 50 companies' market capitalisation loss widened to Rs 11 lakh crore, while the Nifty recorded its biggest intraday decline in over four years.

The BJP-led National Democratic Alliance is leading in nearly 300 seats while the INDIA alliance is leading in over 200 seats, as per data from the Election Commission of India.

After opening at Rs 83.24, the Indian rupee depreciated 28 paise to Rs 83.42 against the US dollar. The stock volatility gauge, India VIX, — which fell over 22% after exit polls — rose over 51% to 31.7 during the session. This is the biggest intraday jump since August 24, 2015.

The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday, according to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market."

Also it is possible that Modi 3.0 may not be as reform-oriented as the market expected and may turn more welfare- oriented, Vijayakumar said. "This is getting reflected in the strength in FMCG stocks," he said.

Shares of Reliance Industries Ltd., State Bank Of India, HDFC Bank Ltd., Larsen & Toubro Ltd., and ICICI Bank Ltd. weighed on the index.

While those of Hindustan Unilever Ltd., Sun Pharmaceutical Industries Ltd., Tata Consultancy Services Ltd., Infosys Ltd., and Britannia Industries Ltd., cushioned the fall.

Alll Nifty sector fell with Nifty PSU Bank taking the most by 12.8% during the session.

The broader indices also tanked as the BSE MidCap fell 6.85% and the SmallCap was trading 5.66% lower. All the 20 sectoral indices on the BSE declined.

The market breadth was skewed in the favour of the sellers as 1,880 stocks declined, 56 rose and 115 remained unchanged on the BSE.