The Indian share market made a strong comeback this morning, a day after the biggest crash in four years wiped out Rs 31 lakh crore investor wealth. The markets had fallen by nearly 6% on Tuesday as BJP did not get a clear majority, but value-buying at lower levels led to a surge today.
Sensex, the Bombay Stock Exchange index representing the top 30 stocks in the country, has returned to 73,000 level, up by 1,400 points around 12:20 pm. Nifty, the 50-share pack of the National Stock Exchange, too has risen 400 points.
Hindustan Unilever, Nestle, Asian Paints, HCL Technologies, HDFC Bank, Kotak Mahindra Bank and ITC were among the biggest gainers in the Sensex pack. The laggards included Larsen & Toubro, Power Grid, and State Bank of India.
Analysts expect that despite the reduced majority, the policy agenda of the current regime will be carried forward to the next term.
“Despite the reduced majority, we expect the policy agenda of Modi 2.0 (investment-led growth, capex, infrastructure creation, manufacturing, etc.) to continue, although with some tweaks. We also expect some populist measures to address rural stress and lift sentiments at the margin, given the nature of the verdict,” said a report by Motilal Oswal Research.
Another analyst suggests the market will take time to absorb the results and volatility will continue till there is clarity on the Modi 3.0 cabinet.
“The market will take some time to absorb the unexpected election results. Stability will return to the market soon but volatility will continue till there is clarity on the cabinet and the key portfolios,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The BJP won 240 seats, much below the 272-mark needed to form government in the country, but managed to reach the figure with the help of its allies, showed the election results on Tuesday. The Congress has won 99.
The exit polls that had predicted a clear majority to the BJP, and led to a big surge in the market on Monday, were proven wrong, sparking yesterday’s crash. Sensex fell over 4,000 points yesterday, marking the biggest crash since the Covid era. The last time the markets posted such big losses was on March 23, 2020, when markets had nosedived by over 13%.