The Indian stock market experienced a seismic shift on Tuesday, June 4th, 2024, as it witnessed its biggest fall in four years. The Indian stock market, represented by the Sensex and Nifty indices, plummeted significantly, with investors losing nearly Rs 30 lakh crore in a single trading session.
Indian stock market Downfall
The market’s downturn was largely attributed to the uncertainty surrounding the final phase of the Lok Sabha election 2024 polls. The Sensex closed 4,389 points down, or 5.74%, at 72,079, while the Nifty shed 1,379 points, or 5.93%, to close at 21,884. The Nifty Bank index also suffered a substantial loss of over 4,051 points, or 7.95%, ending the day at 46,928.
Despite a few exceptions, such as Hindustan Unilever Limited (HUL), Hero MotoCorp, Britannia, Nestle, and Divis Labs, which witnessed gains, the majority of stocks faced a downturn. Companies like ONGC, Coal India, and SBI experienced significant losses.
Experts attributed the market correction to margin calls, particularly affecting retail investors with heavily leveraged positions. Rupak De, senior technical analyst at LKP Securities, noted that the immediate support for the Nifty is visible at the psychological level of 22,000, and a recovery could be possible once the trend moves in favor of the BJP winning the elections comfortably.
The unexpected outcome of the general elections triggered a wave of fear selling in the domestic market, reversing the recent substantial rally. However, according to experts, the market maintains its expectation of stability within the coalition led by the BJP, the major election winner, which mitigates a substantial downside in the medium term.
The turbulent events in the Indian stock market in 2024 serve as a reminder of the inherent volatility and the need for investors to exercise caution and diversify their portfolios to navigate the ever-changing landscape of the Indian stock market.
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