The market fell by 1062 points amid the pressure of negative results

Ahmedabad: The Indian stock market closed with the biggest fall in four months on Thursday amid concerns over the results of the Lok Sabha elections. Along with this, the market is witnessing a decline for five consecutive trading sessions. On Thursday, a decline of Rs 7.35 lakh crore was seen in the wealth of investors. While the Indian stock market has been rising over the past year due to consistent buying and fresh money inflows by local investors – retail, mutual funds, high net worth individuals – the ruling party's grip is expected to loosen as voting takes place in the first three Is. The number of stages for Lok Sabha elections is less than ever before. Along with this, there is also a tendency to make profits by avoiding risks in the market.

In the last five sessions, the Nifty index has fallen 691 points from the level of 22648 points. During this period, BSE Sensex fell from 74,611 to 72,404, indicating a decline of 2,207 points. Five days of continuous selling has seen a total decline of Rs 15.15 lakh crore in investors' wealth.

The futures and options market in the Indian stock market is approximately 10 times larger than buying shares in cash. Thursday was the settlement day for weekly futures and options futures on NSE. Some experts believe the market declined on Thursday as heavy selling in the cash market led to selling in futures to straighten the curve.

On Thursday, Sensex fell 1,062 points to 72,404 and Nifty fell 345 points to 21,957. Sharp selling was also seen today in small-cap stocks, which have given the highest returns in the stock market for the financial year 2023-24. On BSE, small cap index closed at 1111 points and mid cap index at 835 points. According to preliminary data of investment inflows on BSE, foreign institutions have invested Rs. Shares worth Rs 6995 crore were sold in a single session.

The stock market has remained bullish for the last three years due to continuous buying by local institutions. Retail clients are increasingly investing in mutual funds as well as directly in the stock market itself. In contrast, there has been continuous selling of foreign institutions in these three years. The stake of foreign institutions in Indian companies is at an 11-year low, while the stake of domestic institutions is at a seven-year high among companies listed on the NSE at the end of March 2024. However, in the month of April, mutual fund investment in equity schemes declined by Rs 3716 crore to Rs 18,917 crore as compared to March. There is a concern that if new inflows into the fund reduce, it could impact fund buying in the market.

After Phillip Capital's report that BJP will get fewer seats than expected, and there is nervousness among domestic investors and HNIs after the last three phases of elections, there is no global reason for the market decline. It is believed that the market is in recession due to postponement of profit booking and new investments till the election results.

Effect of Adani-Ambani's statement!

During the Lok Sabha election campaign, Prime Minister Narendra Modi had raised the question in a public meeting whether Congress had received large amounts of cash from Adani and Ambani. There is also a section of people who believe that raising the names of the country's two richest people and two biggest industrialists in the campaign can affect the investment sentiment and hence nervousness is being seen. market.

Eight out of nine listed companies of Adani Group saw their prices fall today. All six listed companies of Reliance Group were closed down.

There is an atmosphere of concern on Dalal Street regarding the election results.

There has been a decrease in voting in the first three phases of voting as compared to 2019. Concerns and rumors are spreading that voter disillusionment will cause the ruling NDA to fall short of its target of 400 seats.

If the Modi government returns to the Center but the seats are less than expected, then it may have an impact on the economic policies, shopping in the market has stopped and the tendency to earn profits has increased. There are still four phases of elections and the date of results are left. Come June 4, but those betting on the possible seats of BJP and its allies are calculating that the seats will decrease. Such news has created clouds of worry in the stock market.

Investors shy away from taking risks in an uncertain environment

At present there is an atmosphere of uncertainty at the global and local level. From a geographical point of view the war has not stopped. There are elections in America also in the month of November. Inflation and inflation in the world's largest economy are likely to push interest rates lower rather than higher. Growth in China, the world's second-largest economy, is slowing and the central bank is tightening liquidity. In such a situation, global factors are challenging for the market. On the other hand, the January to March quarter results have either been as expected or weak. Most of the companies are showing profit or sales as per expectation hence stock price is looking expensive due to new buying but market investors are choosing only buying option. Added to this is the concern that the results of the Lok Sabha elections may be contrary to expectations, hence it is believed that investors are selling instead of buying to increase fresh risk.