Lok Sabha election 2019 has sent Indian market in a see-saw mode since the first day of polls on April 11. It's a tale of a buoyant market on expectations of a win by the current government in the Lok Sabha election and the toll taken by economic slowdown, US-China trade tensions and credit crunch in non-banking financial companies (NBFCs) on the domestic indices.
The hopes of a stable government led by PM Narendra Modi after Lok Sabha election led the Sensex and Nifty to rally 10% from their February lows to their all-time highs of 39,487 and 11,856 on April 18, respectively.
Voting for the first phase of Lok Sabha election started on April 11. Sensex which stood at 38,585 on April 10 closed at 39,067 on April 26. During the period, it hit a high of 39,487 on April 18 and low of 38,564 on April 23, 2019 on the back of expectations that Modi government would return to power in Lok Sabha election 2019.
However, the excitement on indices could not last for long as markets came under pressure due to a host of negative factors at home and abroad.
Slowdown of the economy, trade tensions between US and China, jitters over the outcome of Lok Sabha election, decline in economic indicators such as factory output and core sector growth, weakness in high-frequency indicators such as auto sales, and credit crunch in non-banking financial companies (NBFCs) led Sensex to log its fourth nine-day losing streak ever in the history of Indian financial markets.
Indian markets came under pressure for next nine sessions with Sensex losing 1,977 points or 5.06% since April 26 when it closed at 39,067 points. Investors lost Rs 8.53 lakh crore in market capitalisation during the period with the country slipping one slot on the world's most valuable markets list.
But with exit polls scheduled at the end of this week, indices could not remain decoupled from the ongoing electoral fight to form government at the Centre. Markets turned their focus to domestic events from US-China trade war. They also choose to ignore the economic slowdown, falling auto sales and credit crunch in NBFCs and came into election mode.
Sensex and Nifty broke their losing streak in the tenth session on Thursday this week. While Sensex closed 278.60 points or 0.75 per cent higher at 37,393.48, Nifty ended 100 points up at 11,257 level reigniting hope that Modi government would return to power on May 23.
The rally continued on last trading day of this week and led the Sensex rise 537 points at 37,930 and Nifty up 150 points to 11,407.
However, Sensex and Nifty have logged losses since April 11. While Sensex has lost 655 points to 37,930 from 38,585, Nifty fell 177 points from 11,584 to 11,407.
Edited by Aseem Thapliyal