The Indian share market rebounded strongly this morning, recovering from the largest crash in four years that erased ₹31 lakh crore of investor wealth.
Yesterday’s market plunge of nearly 6% was triggered by the BJP’s failure to secure a clear majority in the elections. However, today's value-buying at lower levels spurred a significant rally.
The Sensex, representing the top 30 stocks on the Bombay Stock Exchange, rose by 1,400 points to reach the 73,000 mark around 12:20 pm. Similarly, the Nifty index, comprising 50 stocks on the National Stock Exchange, climbed 400 points.
Among the major gainers in the Sensex pack were Hindustan Unilever, Nestle, Asian Paints, HCL Technologies, HDFC Bank, Kotak Mahindra Bank, and ITC. Conversely, Larsen & Toubro, Power Grid, and State Bank of India were among the laggards.
The inaccurate exit polls, which had predicted a clear BJP majority, initially boosted the market on Monday but led to yesterday’s significant decline when proven incorrect.
Analysts suggest that despite the BJP's reduced majority, the policy agenda of the current regime is expected to continue. "Despite the reduced majority, we expect the policy agenda of Modi 2.0 (investment-led growth, capex, infrastructure creation, manufacturing, etc.) to continue, although with some tweaks. We also expect some populist measures to address rural stress and lift sentiments at the margin, given the nature of the verdict," stated a report by Motilal Oswal Research.
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