- India’s Nifty lost 6% on Tuesday having opened 1% lower.
- Vote counting shows a majority but now a landslide win for the PM Modi-led BJP alliance.
- All eyes turn toward the June 7 RBI policy decision amid Indian political anxiety.
Nifty 50, India’s key benchmark index, extended early losses and closed deep in the red on Tuesday, a day after markets clocked the best trading session in three years.
Markets witnessed a big sell-off, as the vote counting showed uncertainty over a victory by a decisive majority for the Prime Minister Narendra Modi-led Bharatiya Janata Party (BJP) alliance when compared to the predictions by the exit polls over the weekend.
The National Stock Exchange (NSE) Nifty 50 ended nearly 5.50% lower on the day to settle near 22,000.
Stock market news
- The top gainers on Nifty were Hindustan Unilever, Brittania. Hero Moto Corp, Nestle India and Tata Consumer Products. Meanwhile, the big losers on Nifty were Adani Enterprises, Adani Ports, Coal India, NTPC and ONGC.
- Traders said the markets sold off on Tuesday as investors awaited more clarity on the total number of seats that the National Democratic Alliance (NDA) would win.
- The ruling NDA was ahead in nearly 300 seats, per local media. 272 seats is the minimum needed for a simple majority in the 543-member lower house of parliament.
- Exit polls over the weekend predicted that PM Modi will retain power for a third straight term, with BJP-led NDA winning anywhere between 350-401 seats.
- The Indian Rupee has faced rejection at the key resistance of 83.04 against the US Dollar, with USD/INR consolidating below 83.50, as of writing, up 0.53% on the day.
- Markets are also weighing the US economic health prospects after the weak ISM PMI data on Monday.
- ISM Manufacturing PMI index dropped from 49.2 in April to 48.7 in May, missing the expected 49.6 print. The ISM Manufacturing Prices Paid eased to 57.0 in May vs. 60.9 previous and 60.0 expected.
- Last week, India’s economy grew by 8.2% in the fiscal year ended March 2024, sharply higher than the 7% expansion recorded in the previous year, led by a robust performance of manufacturing and construction sectors, per Reuters.
- All eyes remain on the Indian political scenario following the election outcome and the Reserve Bank of India’s (RBI) monetary policy announcements on June 7 for fresh trading impulse.
