The benchmark indices logged their biggest single-day loss in four years and investor wealth plummeted a whopping ₹31 lakh crore after the vote-counting trends showed the BJP well short of the magical 272 figure. It meant that the party that has been in power for a decade has been tossed into an unfamiliar situation where it has become dependent for its survival at the Centre on coalition partners.

The bloodbath saw the 30-share BSE Sensex tumbling 4389.73 points, or 5.74 per cent, to close at a more than two-month low of 72079.05.

The index nosedived 6234.35 points, or 8.15 per cent, intra-day to a low of 70234.43.

The Nifty slid 1982.45 points, or 8.52 per cent, to a low of 21281.45 after which it closed 1379.40 points, or 5.93 per cent, lower at 21884.50.

Market circles said investors were caught unawares by the election trends, as most of the exit polls showed a thumping victory for the BJP.

Though the NDA is likely to come for a third term, its vastly reduced numbers have raised the prospects of bold reforms taking a backseat.

There is also a fear the new government will be a weak one as it will have to depend on an ally such as Nitish Kumar who has switched sides in the past.

“There is bit of uncertainty as investors are concerned about the slowdown of reforms that had been initiated under the BJP-led government. This uncertainty has triggered a correction in the markets as investors reassess the outlook under the new political landscape,’’ Vinit Sambre, head — equities, DSP Mutual Fund, said.

Sambre is optimistic the reform path will continue.

“The development agenda that spurred the performance of equity is likely to persist, irrespective of the party in power. Some of the reforms implemented are integral to the long-term growth and efficiency of these companies and are unlikely to be undone easily.” he said.

“Consequently, once the initial shock subsides and market sentiment steadies, the markets are anticipated to regain stability with its performance aligning more closely with its underlying fundamentals.”

All the sectors that were earlier expected to gain from a stronger Narendra Modi 3.0 took it on the chin. These included PSUs — the BSE PSU index collapsed nearly 16 per cent — capital goods, utilities & power, oil & gas and telecommunications.

As expected, Adani group shares saw heavy losses. While all the 10 listed shares ended in the red, Adani Ports which is set to be a Sensex stock was the worst hit as it cracked over 21 per cent.

“The outcome of the Lok Sabha Elections 2024 has caused a major upset in the markets, leading to nervousness. There has been a significant shift in the political dynamics in Uttar Pradesh, with the Samajwadi Party gaining leads, reflecting the sentiments of minorities,” Amisha Vora, chairperson & MD, Prabhudas Lilladher, said.

“Markets will likely shed the ‘Modi premium,’ causing a correction in PSU and infra stocks. Once this turbulence stabilises, attention will shift to the core macro factors. Investors should brace for volatility in the short term, but the underlying fundamentals of India’s growth story remain strong,” Vora said.

Rupee falls

The lower-than-expected numbers for the BJP affected the rupee and bonds.

The rupee saw its biggest single-day fall in more than a year as it closed below the 83.50 mark at 83.53 against the dollar, a fall of 39 paise over the last close of 83.14.

Forex circles said that a stronger dollar overseas and a crash in equities contributed to its decline. Yields on the benchmark 10-year bond saw its biggest rise in almost eight months as it closed at 7.01 per cent against the previous finish of 6.94 per cent. The fear in the bond markets was the fiscal consolidation may take a backseat with the BJP falling short of majority on its own.