Lok Sabha polls: Sensex falls over 6,000 points, records biggest intraday fall in two years

Sensex today fell over 6,000 points amid the counting trend that depicts lesser seats to the BJP led NDA than the exit poll predictions. This also marks the biggest intraday fall for Sensex in the last two years.

Road ahead for share market

As per analysts quoted by The Economic Times, if NDA's seat tally falls below 300 seats then the fall the share market is witnessing may just be the beginning of a short-term downtrend in the market.

Kranthi Bathini of WealthMills Securities told The Economic Times that the markets will face a big disappointment if the seat for NDA falls below 300.

"Following the exit poll results, the market had factored in around 350 seats for NDA and now if it falls below 300 then it would be a big disappointment for bulls," said Kranthi Bathini of WealthMills Securities told The Economic Times.

Meanwhile, some other analysts as quoted by The Economic Times are of the opinion that the market could be over-reacting to the trends.

"Due to physical counting under VVPAT, the process is slower this time around. I feel the market will once again get steady and high-beta stocks will be bought," said Dalal Street veteran investor Deven Choksey told The Economic Times.

Stocks under pressure

If the market falls further, PSU stocks are likely to be affected the most. On Tuesday, PSU bank stock fell by 15-20% with all the stock in the index seeing a double digit loss. Other PSU stocks like PFC, REC and BEL fell up to 20%.

Meanwhile, Dalal street's fear gauge India VIX jumped 40% to 29.79 to record its biggest single-day gain in 9 years.

As per The Economic Times, Analysts are of the opinion that retail investors should not rush in to buy the dip in today's market and wait for the froth to settle down.

"But I do not think it is the time to short. Go long on the high beta trade - Adanis, PSUs. Just be cautious there. Try and build your portfolio on stocks which are giving you momentum like HDFC twins, SBI Life, UltraTech, ABFRL and Vodafone Idea," market veteran Sanjiv Bhasin told The Economic Times.

The report further adds that this could be the first bear market for new investors who got attracted to stock investing after covid rally.

"New investors, especially those who entered the market after COVID-19, might not have experienced market corrections before. Since market movements are cyclical, errors during corrections can lead to substantial losses for inexperienced investors. Therefore, thorough research and effective risk management are crucial before making any investment decisions. Rushed or speculative investments could result in serious financial repercussions," said Vinnaayak Mehta, Founder of The Infinity Group.

The analysts also told The Economic Times that the election results may not affect the share market in the long run and the investors will soon start investing based on growth outlook and company earnings.

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