India VIX, the volatility index, of the Indian stock market jumped up to 50% to hit a day's high of 31.71 on Tuesday, June 4. The gains were seen as counting trends indicated that Prime Minister Narendra Modi's Bharatiya Janata Party might be reliant on alliance partners to return to power for a third time.
India VIX had declined 15% and settled at 20.94 on June 3 after the exit polls predicted the BJP-led National Democratic Alliance government would return to power with a thumping majority.
Meanwhile, the Indian stock market also saw a steep fall tracking election results. Benchmark indices Sensex and Nifty declined over 8%, its steepest decline in more than four years.
At 2 pm, the Sensex was down 3,474.05 points or 4.50% at 72,955.60 and the Nifty 50 was down 1,100 points or 4.74% at 22,160.45.
PSU stocks were the biggest losers with trading in many of them being temporarily suspended after a fall of 15%. Stocks like BEL, PFC and REC were among the big losers down between 15-20%.
Sensex and Nifty erased all of the gains recorded in Monday's session as exit poll euphoria had predicted more than 350 seats for NDA. The BSE-listed companies also lost over ₹40 lakh crore in market capitalisation.
The broader markets also witnessed a sharper fall. Both the Nifty Midcap and the Nifty Smallcap index are down over 8% in today's session.
"The index has fallen by about 5% due to a weaker trend for the NDA in the poll counting. The market, which had begun to price in a landslide victory for the NDA, is witnessing a significant correction due to margin calls, as retail investors were carrying heavily leveraged positions," said Rupak De, Senior Technical Analyst at LKP Securities.
The analyst sees immediate support visible at the psychological level of 22,000, below which he expects the index to fall further towards 21,400-21,500. "Recovery looks possible once the trend moves in favor of the BJP winning the election comfortably."
India VIX had declined 15% and settled at 20.94 on June 3 after the exit polls predicted the BJP-led National Democratic Alliance government would return to power with a thumping majority.
Meanwhile, the Indian stock market also saw a steep fall tracking election results. Benchmark indices Sensex and Nifty declined over 8%, its steepest decline in more than four years.
At 2 pm, the Sensex was down 3,474.05 points or 4.50% at 72,955.60 and the Nifty 50 was down 1,100 points or 4.74% at 22,160.45.
"If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market. Also it is possible that Modi 3.O may not be as reform-oriented as the market expected and may turn more welfare- oriented," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
PSU stocks were the biggest losers with trading in many of them being temporarily suspended after a fall of 15%. Stocks like BEL, PFC and REC were among the big losers down between 15-20%.
Sensex and Nifty erased all of the gains recorded in Monday's session as exit poll euphoria had predicted more than 350 seats for NDA. The BSE-listed companies also lost over ₹40 lakh crore in market capitalisation.
The broader markets also witnessed a sharper fall. Both the Nifty Midcap and the Nifty Smallcap index are down over 8% in today's session.
"The index has fallen by about 5% due to a weaker trend for the NDA in the poll counting. The market, which had begun to price in a landslide victory for the NDA, is witnessing a significant correction due to margin calls, as retail investors were carrying heavily leveraged positions," said Rupak De, Senior Technical Analyst at LKP Securities.
The analyst sees immediate support visible at the psychological level of 22,000, below which he expects the index to fall further towards 21,400-21,500. "Recovery looks possible once the trend moves in favor of the BJP winning the election comfortably."
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