Lok Sabha Election 2024: Market erases nearly ₹10 lakh crore in a week; will the selloff continue after result?
₹10 lakh crore in a week as the cumulative market capitalisation of BSE-listed firms has dropped to nearly ₹396.6 lakh crore. Nearly 350 stocks in the BSE 500 index fell 1-23 per cent during the week. The Indian stock market is experiencing significant volatility, as evidenced by the India VIX index, which surged by over 26 per cent this week.
"Domestic equity markets are seeing heightened volatility due to concerns around the electoral prospects of the ruling NDA government. While initial projections were that the BJP would easily cross its existing tally of 303 seats in the 543-member Lok Sabha, more recent projections of a sub-300 tally have caused jitters in the market," said Madhavi Arora, Lead Economist at Emkay Global Financial Services. The 2024 Lok Sabha polls are underway, spanning seven phases nationwide, with results slated for announcement on June 4.
While the market has largely priced in the return of the incumbent government to power, there remains some apprehension regarding their ability to secure a decisive majority, which is essential for confidently pursuing promised reforms. Also Read: Expert view: Unexpected election outcome could disrupt Indian stock market, says Trivesh D. of Tradejini Low voter turnout seems to have made investors cautious about the election outcome.
However, most experts still believe the current government will continue after the election. "From a capital market perspective, the broader consensus is that the current government is well-poised to continue its tenor after the elections as well. A debate can happen about whether they will reach their desired targeted seat number, but we believe that this government is positively poised to continue," said Pradeep Gupta, Co-founder &
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