The Indian stock market crashed by over 5,000 points in the Sensex on Tuesday, marking the most significant volatility attained by the corporation throughout the year. This sudden dip left investors staring at a loss of more than Rs 26 lakh crore, which jolted the country’s financial system.
Stockholders resorted to this sell-off primarily because of the current political climate. As the actual and reported trends in the newly celebrated Lok Sabha elections were not as good as expectations conveyed by exit polls, local investors, too, became a bit defensive and started a sell-off binge.
Pundits used political and global risk factors to explain the decline, which included worries about changes in political leadership and geopolitical risks affecting investors worldwide. Even the Nifty50 index crashed by a solid 5%, and out of 50 stocks, 42 alone were in the sell-sell zone.
Adani Enterprises and Adani Ports took the biggest hit, dropping 15% and 20%, respectively, which is the total portfolio’s lowest drop since February 2023. Other Arban Adani group stocks, including Adani Green, Adani Energy Solutions, and Adani Power, also declined, slowing down 16 % to 19%.
Adani group stocks were sold off following their sharp rise on Monday on speculations to poll surveys of a third term for Modi’s administration. Thus, investors’ expectations that would be fuelled by an increasing number of early votes did not materialize, causing a change in investor sentiment.
At the close of the trading day, companies could not effectively reconcile the sudden surprises they encountered in the markets, and as a result, investors focused on their next course of action amidst elevated levels of risk.
