Indian stock market: The domestic equity benchmark indices, Sensex and Nifty 50, are projected to open higher on Wednesday amid caution following a major drop in the previous session and the worst day in almost four years.
Investors were alarmed when the Bharatiya Janata Party (BJP) failed to reach the halfway point in the lower chamber of Parliament and secure a clear majority. However, the BJP-led National Democratic Alliance (NDA) received only a slender majority to establish the government at the Centre.
On Tuesday, the Indian stock market experienced a major selloff as the Lok Sabha election results fell short of what exit polls indicated, causing investors to panic. The Sensex dropped 4,389.73 points, or 5.74%, to close at 72,079.05, while the Nifty 50 fell 1,379.40 points, or 5.93%, to 21,884.50.
“Markets are anticipated to shed the ‘Modi premium,’ resulting in a fall in PSU and infrastructure equities. Once this instability subsides, attention will shift to the key macroeconomic variables influencing India. Investors can expect turbulence in the short term, but the core fundamentals of India’s economic story remain robust,” stated Amisha Vora, Chairperson and MD of Prabhudas Lilladher.
Lok Sabha Election Results 2024
The Lok Sabha election results 2024 disappointed the Indian stock market, as the ruling BJP failed to secure a full majority in the lower chamber of parliament. However, Prime Minister Narendra Modi will be re-elected for an unprecedented third term, albeit with a smaller margin. The BJP-led National Democratic Alliance (NDA) gained around 295 seats, exceeding the 272 required for the coalition to form the government.