Market Crash: Highest Single-Day Fall Since Covid-19!

Investors lose 30 lakh crores in one of the WORST DAY for stocks since March 2020

Author

Yash Upadhyaya
June 04, 2024

Tale of the Tape 

Hey guys. Markets got wrecked. 🤕

Nifty and Sensex recorded their worst single-day fall since March 2020. Fears that a weaker-than-expected mandate for the BJP may slow down the India growth story CRUSHED sentiment. Read our top story below for more information. Midcaps and Smallcaps were equally smoked; -8% each. ONLY 34 stocks in the NSE500 ended in the green. 🚨

Today’s collapse saw investors lose Rs 30 lakh crore in just 1 trading day. Check out the market heatmap below: 😭

Except for FMCG (+1%), all the other sectors ended in the red. PSU Banks (-15%), Oil & Gas (-12.5%) and Metals (-11%) got KO-ed. 👊

India VIX, which measures the overall market volatility, rallied +35% intraday; its highest single-day gain in 9 years. 📈

HUL (+6%) was the top gainer on Nifty as investors loaded up defensive stocks. Dabur, Colgate and Marico also jumped between 3%-6% each.  Chandrababu Naidu promoted Heritage Foods gained +8%. 🚀

Here are the closing prints: 

Nifty

21,885

-5.9%

Sensex

72,079

-5.7%

Bank Nifty

46,929

-8%

Market
WTF! Just Happened

What a WILD day. After exit polls juiced up markets on Monday, everything came CRASHING down. At the time of writing, it looks like the BJP (standalone) is leading with 238 seats. These numbers will probably go up, but it's tough to say whether the BJP will be able to secure a simple majority. If no horse trading happens, then the BJP should come back to power albeit with a reduced mandate. 👎

What does all of this mean and why are investors SO spooked? 

The key phrase here is ‘policy priorities’. Or, in other words, there will be more give and take between an infra & manufacturing focus and populism & welfare. The pendulum swung one way over the last decade, which won foreign investor approval and gave teeth to the India growth story. Now it’s time to swing a little bit the other way -- and no that doesn’t mean it's all doom and gloom. 🙊

Experts say we can expect a slight slowdown in capex as the BJP may have to give into coalition demands. Newer infra projects might be announced less frequently, but the focus on flagship schemes like PLI will likely be maintained. Key Agri, food subsidies and land reforms may be put into cold storage. So the general thrust remains, but the intensity comes down a couple of notches. 📉

But, on the other side, we could also see the BJP FINALLY loosening the fiscal purse. Some relief on the tax (income, petrol, GST) front could be in the offing. The GOI might also boost rural consumption with new populist schemes. Fun fact: this is why HUL (+6%) and other FMCG stocks JUMPED today despite a broader meltdown. 🍞

TL;DR: Wait for a clearer picture. Trust the India growth story. Look for new opportunities, there will ALWAYS be money to be made. 🤞

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Specials

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Charts

Chartbusters

Here’s a look at the top NSE 500 losers in today’s meltdown. Taking poll position, no surprises here, is REC, which crashed -25%. Power and PSUs might be a lesser priority moving forward, which is why Power Finance Corporation was the second biggest loser, falling -23%. Finally, what would a Modi setback be without an Adani stock (Adani Ports) down -21%. Check out their (horrifying) charts below: 😣

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