Stock Market Crash: Capital goods stocks in freefall as investors tap out; BEL, BHEL hit lower circuits

All constituents of the BSE Capital Goods index bled in the red.

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Shares of capital goods stocks came under fire on June 4, with the entire BSE Capital Goods index plummeting close to 10 percent as early trends of election results painted a weaker-than-expected win for the BJP-led NDA.

The capital goods pack had been at the heart of the incumbent government's infrastructure push, making it one of the best-performing sectors in recent times. Analysts had also named the sector as one of the key beneficiaries of the BJP's majority win in the elections.

However, a smaller-than-anticipated majority for the BJP dented sentiment among investors and triggered intense profit booking.

"The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday. If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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"There are also concerns that the return of the Modi government may not be as reform-oriented as the market expected and may turn more welfare-oriented," Vijaykumar stated.

As a result, shares of Bharat Electronics were the worst hit within the BSE Capital Goods index, slumping over 15 percent, followed by BHEL which tanked around 15 percent.

Other stocks in the capital goods index, Hindustan Aeronautics, ABB India, CG Power, GM Infra, Kalpataru Projects down 10-11 percent. All other constitutents of the BSE Capital Goods index also bled in red and traded anywhere between 1-8 percent lower.

Also Read | Defence stocks bleed upto 15% as profit booking heats up; Bharat Electronics, HAL, Mazagon Dock worst hit

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.