Market Update: Gift Nifty Rises, HUL Surges, Adani Shares Plunge Amid Election Uncertainty

Indian Share Markets Struggle Amid Election Uncertainty

The Indian share markets faced significant turmoil on June 4, with the Sensex and Nifty witnessing substantial drops. This downturn was primarily driven by the uncertainties surrounding the 2024 Lok Sabha election results.

Market Performance

On Tuesday, the benchmark Sensex plummeted by 5,661 points, a decline of 7.4%, reaching an intraday low of 70,785.12. The closing bell saw the BSE Sensex down by 4,390 points, a decrease of 5.7%. Similarly, the NSE Nifty dropped by 1,380 points, down 5.9%.

Sectoral and Stock Performance

The broader market also ended negatively, with the BSE Mid Cap and BSE Small Cap indices falling by 8% and 6.8% respectively. The only sector to remain resilient was the FMCG sector, while the power, telecom, energy, and oil & gas sectors faced intense selling pressure. HUL, Nestle, and Britannia emerged as top gainers, while Adani Ports, Adani Enterprises, and ONGC were among the top losers.

Impact on Gold Prices and Global Indices

Gold prices for the latest contract on MCX were trading slightly lower by 0.3% at Rs 72,009 per 10 grams. Meanwhile, the Gift Nifty was up by 122 points, indicating a potential positive start for Indian markets today.

Top Buzzing Stocks

Reliance Industries

Reliance Industries’ shares experienced a significant drop of 9.6% on BSE, wiping out Rs 1.7 trillion in investor wealth. This sharp decline was triggered by poll estimates suggesting that the NDA might not secure as many seats as exit polls had predicted.

Defence Stocks

Defence-related stocks also saw considerable declines, with shares falling by up to 15% as investors took profits following a recent bull run. The indigenization push under the Atmanirbhar Bharat initiative had previously driven these stocks to new highs.

HUL’s Surge in Share Price

Hindustan Unilever (HUL) shares rose by 4.7% amid early trends suggesting that the election results might not align with exit polls. This increase was fueled by foreign brokerage reports indicating that consumption stocks could benefit if the opposition gained favor. They predicted a quicker recovery in consumption if the NDA did not perform well, while a strong NDA performance would result in a gradual recovery in rural consumption.

Adani Group Shares Plunge

Adani Group stocks took a severe hit, with Adani Ports leading the decline with a 20% drop. All 10 Adani Group companies saw significant losses, with shares falling between 12% to 20%. This decline was attributed to uncertainties surrounding the election results. The total market capitalization of Adani Group stocks fell by around Rs 3 trillion.

Financial Performance

Despite this, Adani Group reported a 55% increase in profit after tax (PAT) for FY24, reaching Rs 307.7 billion. The group’s EBITDA grew by 40% year-on-year to Rs 6.6 billion, and net debt at the group level remained stable at Rs 2.2 trillion. Adani Ports and Adani Power saw a reduction in net debt during FY24.

Railway Stocks Decline

Railway stocks also faced significant declines, with shares falling by up to 20%. Companies such as Titagarh Rail Systems and RailTel Corporation tumbled nearly 20%, while others like IRCTC, RITES, and Texmaco Rail & Engineering saw declines of over 18%. This downturn was driven by election trends diverging from earlier exit poll predictions, which had indicated a strong BJP victory.

In conclusion, The Indian share markets are experiencing high volatility due to election uncertainties. While some sectors and stocks have managed to remain resilient, the overall market sentiment remains cautious as investors await clearer election outcomes.