 "Marketquake: PSU, Adani stocks feel verdict tremors; Nifty PSE tanks 16.4%")
Public sector enterprises (PSEs) and Adani Group stocks saw the worst hammering on Tuesday as election trends showed that the Narendra Modi-led Bharatiya Janata Party (BJP) struggled to reach the halfway mark.
The National Stock Exchange Nifty PSE Index tanked 16.4 per cent, with Rs 10.8 trillion wiped out from the market capitalisation (mcap) of state-owned companies.
Meanwhile, over Rs 3.6 trillion eroded from Adani Group mcap.
A day earlier, both the public sector undertaking (PSU) pack and Adani Group stocks were among the biggest gainers after exit polls suggested that the BJP would bag two-thirds of seats in the 543-member Lower House of Parliament.
Adani Ports and Special Economic Zone slipped 21 per cent, while flagship firm Adani Enterprises corrected by 19 per cent. Adani Energy Solutions and Adani Wilmar also locked in lower circuits of 20 per cent and 10 per cent, respectively. The Gautam Adani-led group’s mcap dived 19 per cent to Rs 15.8 trillion.
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Although the BJP-led National Democratic Alliance has secured a majority, the stark difference in the exact results from that of exit polls came as a surprise to market participants.
Meanwhile, PSU heavyweights Life Insurance Corporation of India, GAIL (India), Oil India, and Oil and Natural Gas Corporation logged double-digit falls.
REC and Power Finance Corporation also fell over 25 per cent and 23 per cent, respectively, becoming the biggest losers.
The fall comes after a good rally in the index this year, where it had gained nearly 40 per cent before Tuesday’s loss.
Market analysts said that the selloff was due to concerns that a coalition government at the Centre may focus more on welfare schemes and impact disinvestment targets.
“We expect market derating in the short term, as the risk on India has gone up. PSUs and capital goods are the most vulnerable sectors, from which we would stay away for the time being. On the other hand, consumption should come back, and we see fast-moving consumer goods (FMCG) and value retailers making a strong return,” said Emkay in its India Strategy report after election results.
Fast-moving consumer goods (FMCG) stocks bucked the weak market trend as investors sought safe-haven investment opportunities.
Hindustan Unilever, Dabur, Colgate-Palmolive India, and Marico posted gains between 3 per cent to 6 per cent.
The Nifty FMCG rose about 1 per cent — the only thematic index to flash green in a sea of red.