The Dalal Street witnessed a bloodbath on vote counting day on June 4, as market participants remained concerned after the BJP-led NDA received a clear mandate but not returning with a much stronger majority as expected in exit polls.
The Nifty50 index registered the biggest single-day fall since March 23, 2020 (during Covid lockdown crash).
During the day, the Nifty index fell 1,982.45 points and tested a low of 21,281.45, while Sensex tanked 6,234.35 points to low of 70,234.43. Both indices were down 8 percent for the day, which was the biggest single-day fall since at least February 2022.
At close, the Sensex was down 4,389.73 points or 5.74 percent at 72,079.05, and the Nifty was down 1,379.40 points or 5.93 percent at 21,884.50.
In today's fall, investors' wealth eroded by around Rs 30 lakh crore, as the market capitalization of BSE-listed companies slipped to Rs 395.99 lakh crore, from Rs 425.91 lakh crore in the previous session.
Meanwhile, volatility surged with the India VIX jumping 50 percent to above 31, intraday. This was the biggest jump in the volatility index in at least nine years.
Biggest losers on the Nifty included Adani Ports, Adani Enterprises, ONGC, NTPC and SBI, while gainers were HUL, Nestle, Britannia Industries, Hero MotoCorp and Tata Consumer Products.
Except FMCG, all other sectoral indices ended in the red with Realty, Telecom, Metal, Capital Goods, Oil & Gas, Power, PSU Bank down more than 10 percent each.
The BSE Midcap index shed 8 percent and smallcap index fell nearly 7 percent.
The Nifty Bank index ended eight percent lower at 46,928.60, after hitting low of 46,077.85 on an intraday basis.
Outlook for June 5
Aditya Gaggar Director of Progressive Shares
On the election result day, the Indian equities commenced the session on a tepid note. Mayhem was seen in the form of panic selling across the board in the morning trade itself. In the mid-session, some recovery was seen but did not last for long as another round of selling in the last session dragged the Index lower to end the session with a massive cut of 1379.40 points at 21,884.50.
Barring FMCG, all the sectors ended the session with a sharp decline with PSU Banks and Energy being the major underperformers.
The real pain was seen in the Broader markets as Mid and Smallcaps corrected over 7.8% to underperform the Frontline Index.
On the daily chart, the Index has formed a massive red candle which suggests extreme pessimism in the markets and the impact of counting is likely to persist tomorrow as well. The immediate support is located at 21,600 while a level of 22,500 will be a strong hurdle.
Shrikant Chouhan, Head Equity Research, Kotak Securities:
Today the benchmark indices corrected sharply. Among Sectors, almost all the major sectoral indices witnessed profit booking at higher level, but PSU Banks and Energy indices lost the most. Technically, after an early morning sharp selloff the market breached the crucial support of 20-day SMA (Simple Moving Average) or 22500/74000 and post breakdown the selling pressure intensified.
In addition, on daily charts the index has formed a long bearish candle and is also trading below short term and medium-term averages, which is largely negative. For the traders now, 50-day SMA or 22400/73500- and 22500/74000 would be the key resistance areas while 21600-21300/71000-70200 would act as key intraday supports zones. We are of the view that the current market texture is extremely volatile and uncertain; hence, it is advisable that traders should remain cautious for the next few trading sessions.
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
Nifty witnessed a gap down opening and nosedived to close down ~6% for the day. The Nifty has decisively broken down below the previous swing low of 21820 which has violated the higher top and higher bottom formation and suggests change in short term trend. Our primary outlook is that Nifty shall now retrace the rise it has witnessed from 18840 to 23340 between the period October 2024 to May 2024.
The crucial support levels to keep handy are 21100 which is the 200-day moving average and 50% Fibonacci retracement level of the entire up move. A close below this support zone can lead to further decline towards 20560 which is the 61.82% Fibonacci retracement level. On the upside, 22310 – 22550 shall act as an immediate hurdle from short term perspective. The range of consolidation is likely to be 21000 – 22500.
Bank Nifty has also broken down from the rising channel indicating a change in trend. We expect the Bank Nifty to correct towards 46150 – 44000 which are the 200-day moving average and the 38.2% Fibonacci retracement level of the rise from 32300 – 51100. On the upside, 48600 – 49200 shall act as an immediate hurdle.
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