Sensex, Nifty extend losses, election uncertainty drags street

Markets likely to be choppy until election results are out

Benchmark indices BSE Sensex and NSE Nifty 50 extended losses after having opened mildly red on May 9. The ongoing general elections have been keeping the Street on its toes. The Sensex and Nifty have been trading weak for the last four sessions, falling from near all-time highs.

While oil and gas, and construction companies led the losses, automobile companies were the top gainers.

Larsen & Toubro was the biggest laggard on the Nifty 50 index after the company reduced its future margin guidance to 8.2-8.3 percent for FY25 to bake in supply chain disruptions, an uncertain political environment, and ongoing conflicts across several areas.

Automobile company Hero MotoCorp's shares surged by over 5 percent following its robust Q4 FY24 performance, leading brokerages to uphold a bullish outlook on the company due to its promising growth potential.

At 10.17 am, the Sensex was down 352 points or 0.5 percent at 73,114.17, and the Nifty 50 was down 102 points at 22,200.40. In the broader market, both BSE Midcap and BSE Smallcap shed 0.3 percent.

The market attempted a recovery from the day’s losses yesterday, but ended flat. The indices could continue to try to recover later today as well, but the upside could be limited, said Nirav Karkera, Head of Research, Fisdom.

The ongoing general elections are weighing on the market, with the Street keenly watching the margin of win for the incumbent BJP-NDA government. “Markets are expected to remain choppy until election results are out,” said Gaurang Shah, Senior Vice President at Geojit Financial Services.

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Shah expects to see intraday pullbacks and pushback in the near term, unless India VIX indicates a decline in volatility. India VIX, which experienced a slight decline in the preceding session following nine consecutive sessions of ascent, saw a resurgence on May 9.

Further, the market has not found any meaningful support from Q4 earnings yet.

Given the absence of any positive triggers to the market, the market is likely to remain weak. “As long as the index remains below 22,400, short-term weakness will persist,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C Mehta Investment Interrmediates. “If the index can stay above 22,410, a relief rally to 22,500-22,600 cannot be ruled out,” he said.

“On the downside, the index will find strong support at 22,100-22,000 levels,” Yedve said in a note.

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