The Fact News Service
New Delhi, June 6
Two days ago, ahead of the release of the Lok Sabha election results, investors took a risk-averse stance, dragging the Sensex down 2,700 points.
However, experts believe that as the government formation takes place, within a week’s time the stock market is likely going to go up and that now is the best time to invest. As the NDA coalition takes oath and in the subsequent days, the markets will go in the green.
Earlier, the stock market tumble was led led by financial stocks and industry heavyweight Reliance Industries. The BSE Sensex was down 2,800 points, or 3.66%, at 73,669.28 as of 9:20 a.m on June 4, the day election results were being announced. The Nifty50 fell 809 points, or 3.6%, to trade at 22,409, and the India VIX, a measure of volatility, increased 20% to 25 levels. The market capitalization of all BSE-listed companies dropped to ₹417.13 lakh crore, a decrease of ₹8.78 lakh crore.
Reliance Industries and HDFC Bank caused the Sensex index to drop by 565 points. L&T, SBI, ITC, NTPC, and Power Grid were among the other stocks that pulled the index lower.
This followed the exit polls on Monday that predicted PM Modi would win handily, sending markets to record highs. The NDA alliance, led by the Bharatiya Janata Party, appeared to be leading in over 290 seats based on preliminary results.
On June 4, the top Nifty losers were Coal India, L&T, ONGC, Adani Ports, and Adani Enterprises. Except for the pharmaceutical and healthcare indices, every sector was in red as the polls results started trickling in. PSU banks and the oil and gas industry were the ones to lose the most.
Even though Morgan Stanley is “overweight” on Adani Ports and has set a target price of Rs. 1,517 per share, Adani group stocks have dropped as much as 11% today. By 9:45 a.m., Adani ports had dropped by almost 9%.
By the time it was 10:00 am on June 4, Reliance Industries’ share price had dropped 2.7% to Rs. 2934. Reliance was also regarded by Morgan Stanley as “Overweight,” with a target price of Rs. 3,046 per share.
As of 10.AM, Larsen & Toubro had dropped 3.35% to Rs.3766, ONGC had dropped 5.56% to Rs.268.25, and Coal India had dropped 6.16% to Rs.480.
SBI’s share price dropped 5.34% to Rs. 857.40, ITC’s to Rs. 421.90, NTPC’s to Rs. 373.10, and Power Grid’s to Rs. 318.60.
How will the market be in the next five years?
Experts says that in the coming future, the five themes to bet on for the next five years are infrastructure, financial services, new-age tech, hospitality and consumer discretionary, capital goods, and engineering. And the current economic momentum will continue, so there is no need to modify the portfolio’s current allocations in light of the election results.
