Equity investors suffered a massive loss of Rs 31 lakh crore on Tuesday as markets went into a tailspin with the BSE Sensex tumbling nearly 6 per cent as vote counting trends showed the BJP may not have a clear majority in the Lok Sabha polls. Erasing the record-rally of the previous trade, the 30-share BSE Sensex cracked 4,389.73 points or 5.74 per cent to settle at 72,079.05. During the day, the benchmark tanked 6,234.35 points or 8.15 per cent to hit a nearly five-month low of 70,234.43.
The Sensex jumped 412.23 points on Friday, braving heavy volatility during the day, amid the Reserve Bank of India maintaining status quo on the benchmark lending rate and buying in index heavyweights Reliance Industries Limited and ITC. The BSE Sensex climbed 412.23 points or 0.70 per cent to settle at 59,447.18. During the day, the benchmark hit a high of 59,654.44 and a low 58,876.36. The Nifty also gained 144.80 points or 0.82 per cent to finish at 17,784.35.
Market participants are impressed that Rajan has set the ball rolling on his first day at RBI with a series of announcements, raising expectations that more are in store.
Do not decide your investments based on election results.
A majority of economists predicted RBI Governor Raghuram Rajan would leave policy rates unchanged on Tuesday and expected a dovish commentary, as crude oil prices and inflation cool off.
As many as 142 stocks from the S&P BSE500 index are currently trading below their level of May 12, 2014
Analysts attribute this volatility to selling by FPIs and FIIs.
Experts believe volatility is here to stay for some time, at least till China stabilises and clarity regarding the US Fed's interest rate move emerges.
Except for liquidity, which could act in favour or against the market in the short term, most market participants are bullish.
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