The stock market witnessed a bloodbath on vote counting day as it delivered a surprising outcome on Tuesday. Market participants expressed concern as despite securing a clear mandate, the BJP-led NDA is not returning with a stronger majority as expected in exit polls.

The market saw its worst fall in the last 4 years since March 2020 and erased all of Monday’s gains after exit polls predicted strong numbers for the BJP.

Volatility surged with the India VIX jumping nearly 40% to above 29. This is the biggest jump in the volatility index in at least 9 years.

All sectors were in the red with bank stocks falling by 7.8%, realty dropping by 9.1%, infrastructure declining by 10.5%, and oil and gas stocks losing 11.7%. State-run companies and banks retreated by 17% and 16%, respectively.

Sensex opened lower at 76,285.78 and fell drastically to touch a low of 70,234.43 during intraday trades. At close, Sensex was at 72,079.05, down 4,389.73 points, or 5.74%.

Nifty 50 opened lower at 23,179.50 and touched a low of 21,281.45 during the day. At close, the Nifty 50 was at 21,884.50, down 1,379.40 points, or 5.93%.

Investors’ wealth eroded by around Rs 30 lakh crore, as the market capitalisation of BSE-listed companies slipped to Rs 395.99 lakh crore, from Rs 425.91 lakh crore in the previous session.

The broader market also ended deep in the red, with the BSE SmallCap closing down 6.79% and the BSE MidCap down 8.07%.

Among the sectors, barring the FMCG index, which was up 0.95%, all other sectoral indices closed deep in the red.

PSU Bank index was down more than 15%, while the Oil & Gas index was down 11.80%, followed by the Metal and Realty indices. The Bank and Financial Services indices also lost heavily.

Banking heavyweights HDFC Bank and ICICI Bank were among the top three laggards.

State Bank of India (SBI) had a significant role in the collapse. SBI plummeted by an enormous 19%, reaching an intraday low of Rs 732.

Shares of Bank of Baroda, PNB, SBI, Bandhan Bank, Axis Bank, and IndusInd Bank, among others, slipped up to 9%, as against a 5% decline in the Bank Nifty index.

On the election outcomes, the experts pointed out that a slim majority for NDA may trigger short-term uncertainty on the policy front. However, the overall outlook for the Indian stock market may not drastically change.

Asian share markets retreated as global investors awaited India’s official election results.