Mumbai: A global rout in equities amidst escalating trade tension between the US and China coupled with a majority of exit polls showing BJP trailing behind Congress in the recently held state polls triggered massive selling on the domestic bourses.
The across the board steep fall in domestic equities wiped out almost Rs 2.5 lakh crores of investors wealth on Monday taking their total loss in the past one week to Rs 5.6 lakh crore.
The Sensex plummeted 713.53 points or 2 per cent to close the session at 34,959.72 while the Nifty slipped below its crucial support level of 10,500 to end the day at 10,488.45, down 205.25 or 1.92 per cent. Market participants added that the spike in global oil prices following the cut in production announced by Opec and latest trade figures signalling an economic slowdown in China also impacted sentiments towards the entire emerging market risk assets.
“In our view, a 3-0 or 2-1 score for the BJP may result in a moderate market rally, subject to global developments with the market ascribing a higher probability of the BJP winning the national elections in April-May 2019. However, a 0-3 or 1-2 score for the BJP may result in a sharp market correction as the market will likely take a dim view of the BJP’s prospects in the next national elections given the large contribution of these three states to the BJP’s 2014 win,” said analysts at Kotak Securities.
