Low voter turnout, high VIX! Why stock investors suffered Rs 11 lakh crore loss in 3 days
stock market full of speculations around the implications of a low voter turnout in all the first three phases of the ongoing Lok Sabha election, Nifty today fell below its 50-DMA. In the last three days, Sensex has lost over 1,000 points while the combined market capitalisation of all BSE-listed stocks has fallen by Rs 11 lakh crore.
Dalal Street has been defying cues from Wall Street as the Dow Jones has been trending up for four consecutive trading sessions, but Nifty has turned highly volatile and apprehensive amid selling by FIIs.
The stock market's fear index India VIX has zoomed 66% to fresh 52-week high levels by jumping non-stop for 9 consecutive trading sessions. The ongoing volatility is likely to remain intact until the result of the Lok Sabha election is declared on June 4.
So who's voting the bulls out of Dalal Street?
1) Pre-election nervousness
After the first two phases of voting saw a relatively lower turnout, today's polling saw 40% voter turnout till 1 pm.
«One view is that the definite and smooth victory of the ruling dispensation is a bit uncertain now. The market which has already discounted a BJP/NDA victory is a bit unsure now. Perhaps, this can be the reason for the apprehension in the market and the bulls shedding their aggressive stance,» said Dr VK Vijayakumar of Geojit Financial Services.
Also read | Election Jitters? Why stock market's fear gauge VIX is behaving strangely
2) Valuation tension
With the Sensex and Nifty near record-high levels, a section of the market is also
