Market Meltdown: All Banking Stocks Plummet; SBI and Bank of Baroda Drop Over 12% Amid Lok Sabha Election 2024 Result

Market Meltdown: All Banking Stocks Plummet; SBI and Bank of Baroda Drop Over 12% Amid Lok Sabha Election 2024 Result

All the major banks like Bank of Baroda, Punjab National bank (PNB), State Bank of India (SBI), Bandhan Bank, Axis Bank, and IndusInd Bank plummet of up to 9 per cent.

Oliviya KunjumonUpdated: Tuesday, June 04, 2024, 01:52 PM IST
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Market Meltdown |

Following the previous day record highs, the banking stocks on Tuesday, June 4, experienced a significant downturn as investors hurried to book profits after the exit poll predictions and the market hitting record high, June 3, a day before the official counting of the Lok elections 2024 outcome.

All the major banks like Bank of Baroda, Punjab National bank (PNB), State Bank of India (SBI), Bandhan Bank, Axis Bank, and IndusInd Bank plummet of up to 9 per cent .

Share performance - Banking Sector

At 1:32 PM IST, Bank of Baroda hit the hardest, with its shares plummeting to Rs 251.15, a decrease of 15.34 per cent, followed by State Bank of India (SBI), marking a substantial drop, with its shares falling to Rs 787.80, a decline of 13.03 per cent.

ICICI Bank's share price fell to Rs 1,079.85, a decrease of 6.93 per cent and Axis Bank's shares dropped to Rs 1,133.15, down by 7.43 per cent. IndusInd Bank shares fall to Rs 1,406.05, a decrease of 8.10 per cent.

Share performance - Banking Sector

Share performance - Banking Sector | BSE

"The market is witnessing a bloodbath today due to the unexpected election results, which deviated from the exit poll projections. The BJP was expected to perform strongly, as indicated by the exit polls, and the markets had reacted positively to those numbers. However, the actual results showed the BJP is not near the 380 mark which most of the exit polls were indicating and it is surprising that in Uttar Pradesh where BJP has a strong hold is struggling to gain majority," said Dr. Ravi Singh, SVP - Retail Research Religare Broking Ltd.

"Once the election results are finalized and the event is over, it is likely that this fall will stop, and the markets will consolidate. Despite the setback, it is anticipated that the BJP will still form the government, and the market turbulence should subside after the event. Investors should use this dip as an opportunity to accumulate fundamentally strong stocks. However, they should avoid averaging down on loss-making positions. Instead, focus on identifying quality companies with solid fundamentals and invest in them at the current discounted levels," he added.

Contributing to uncertainty, the decline in the banking stocks contributed to a broader negative sentiment in the stock market. The BJP led NDA government in the current ongoing counting of the Lok Sabha 2024 election outcome is securing fewer seats than the projected exit polls, while the opposition INDIA alliance performs better than expected.

This unexpected political outcome added to market's anxiety, prompting a wave of profit taking and cautious trading among investors.

Stock Market

The 30-share BSE Sensex at 1:42 PM IST were trading at the day at 72,464.18, down by 4004.6 points or 5.24 per cent. Similarly, the NSE Nifty trading negatively at 22,072.15, down by 1,191.75 points or 5.12 per cent.

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