India’s key equity indices Sensex and Nifty lost heavily on Monday following mixed sentiments of investors as vote counting for the assembly elections in Gujarat and Himachal Pradesh witnessed a neck to neck position for BJP and Congress. BSE Sensex shed 98.45 points or 0.29% to open at 33,364.52 whereas NSE Nifty lost 70.15 points or 0.68% to begin at 10263.1. In the early trades, BJP was seen leading the charge in the votes but as counting progressed further, Congress inched ahead sharply and was seen charging ahead. Following this, the benchmark Sensex tanked as much as 867.34 points to hit the day’s low of 32595.63 while The broader Nifty plummeted 188.3 points to hit the day’s low at 10,074.8.
As the counting progressed BJP again inched ahead of Congress which led to a partial recovery in the key stock indices, but were still hovering in the red. At 9.32 am, Sensex was trading 248 points or 0.74% down at 33,214.97 while Nifty was trading 96.8 points or 0.94% lower at 10,236.45.
Shares of heavyweight companies such as HDFC, Reliance Industries, ITC, Infosys, HDFC Bank, TCS, ICICI Bank, HUL, Yes Bank contributed massively to the Sensex losses. Collectively these nine shares alone washed off as much as 250 points to the index losses. Meanwhile, on Friday, India’s foreign exchange reserves declined by USD 1.044 billion to USD 400.897 billion in the week to December 8 due to a steep fall in foreign currency assets, the Reserve Bank said on Friday. The foreign currency reserves, a major component of the overall reserves, declined by USD 1.028 billion to USD 376.428 billion, according to the RBI data.
Earlier on Friday last week, Indian stock markets closed higher on Friday after blazing in the morning trades as investors rejoiced the exit poll results which has predicted an easy win for BJP in Gujarat and Himachal Pradesh. S&P BSE Sensex concluded 216.27 points or 0.65% higher at 33,462.97 whereas NSE Nifty added 81.15 points or 0.79% to settle at 10,333.25.
A relief rally is underway in the market. A potentially convincing win, which is 110+ seats for the BJP in a state perceived to be most impacted by GST/demonetisation should at best, and will only boost market sentiment. Mahesh Nandurkar, India Strategist, CLSA. According to various market experts, BJP winning 110-115 mostly priced in, but a stronger victory with over 125+ seats will boost bull sentiment in the market. On the contrary, if BJP wins around a 100 or less, the markets will be disappointed.