Indices sink as Dalal Street takes cues from Poll Street
BJP may not get as many seats in the general election as projected earlier, prompting investors to cut some of their bets. Regulatory actions against the banking sector that could slow lending are also weighing down sentiment. The Volatility Index or VIX shot up to a 19-month high, suggesting traders see greater risk in the market in the near term.
The NSE Nifty fell 345 points, or 1.55%, to close at 21,957.50. The BSE Sensex declined 1,062.22 points, or 1.45%, to end at 72,404.17.
The selloff resulted in markets shedding ₹7.5 lakh crore in market capitalisation. Growing chatter on social media and betting trends in the unofficial satta bazaar suggesting that the BJP numbers could be lower than anticipated has made investors nervous.
«There is some profit booking in the market after the voter turnout in the third phase has been lower than expected, which is leading to the uncertainty in some seats where the margin is thin,» said Rajesh Palviya, head of technical and derivatives research at Axis Securities. «The market will remain cautious around this in case the trend continues in the fourth phase.»
That said the BJP-led NDA coalition is still the favourite to win the election.
Midcaps & Smallcaps
The Nifty Mid-cap 100 index dropped 1.7%, the Small-cap 250 index declined 2.7% and the Micro-cap index fell 2.6%.
Out of the 2,704 stocks traded on the NSE, 480 advanced and 2,107 declined on Thursday.
«We have seen a fall in markets due to a general profit booking, as May usually sees a lack of participation,»
