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Election Results Trigger Market Turmoil: Tech Stocks Tumble as Sensex Drops 4,000 Points

The image depicts a stock market display screen with multiple stock prices showing a significant downtrend, indicated by red arrows and negative percentage changes. A stylized, cartoon-like graphic overlay shows a rocket with the Indian flag crashing downward, aligned with the downward movement of the market trends on the display, symbolizing a rapid decline in stock values. This visual metaphor effectively captures the dramatic impact of a stock market crash. The background is filled with numeric stock data in white against a dark background, enhancing the visibility of the red graphical elements representing the market downturn.
By
Anurag Trivedi

In a sharp turnaround from Monday's performance, a significant decline struck Indian new-age tech stocks on Tuesday (June 4), influenced by a substantial downturn in the Indian stock market. This downturn saw the market drop by approximately 4,000 points due to early indicators from the 2024 Lok Sabha Election results.

As of 11:30 AM IST, the 23 new-age tech stocks monitored by Inc42 experienced a decrease ranging from 1% to over 10% coinciding with the market downturn.

It's important to acknowledge that the majority of exit polls had predicted a strong majority for the Bharatiya Janata Party-led National Democratic Alliance (NDA) and Prime Minister Narendra Modi. This anticipation had previously led to a surge in the Sensex by 3.39% to 76,468.78 and the Nifty50 by 3.25% to 23,263.90 on Monday.

On Monday, amidst the market rally, 14 of the 23 new-age tech stocks tracked by Inc42 rose between 0.7% and 13%.

However, today's vote count has revealed significant discrepancies from the exit poll forecasts.

By 11:30 AM IST today, the Sensex had plunged by 3,278 points to 73,321 (a 4.28% decrease), and the Nifty50 had tumbled by nearly 1,074 points to 22,233.35 (a 4.61% drop). The market's downturn continued even after this point.

Within the new-age tech sector, TBO Tek registered the most substantial loss by dropping 10.4% to INR 1,296.9 on the BSE by 10:30 AM IST. This follows the company's highly successful IPO last month, where it opened at a 50% premium.

Moreover, Awfis and Nazara Technologies saw significant declines of 8.5% and 7.6%, respectively, reversing gains from the previous day. Paytm, facing additional pressures from regulatory challenges, saw a 5% reduction, hitting the day's low at INR 357.2 on the BSE.

Other notable declines were observed in Mamaearth, Nykaa, and Delhivery, with drops ranging from 5% to 7%. Additionally, RateGain, Zomato, PB Fintech, Go Digit, EaseMyTrip, and CarTrade experienced decreases between 3% and 4%. Yatra had the smallest decline, falling by 1.5%.

V K Vijayakumar, chief investment strategist at Geojit Financial Services, commented on the market's response, attributing the steep drop to the initial results not aligning with the exit polls. He noted potential disappointment if the BJP does not secure a majority on its own, suggesting this sentiment was reflected in the market's reaction. He also speculated that Modi's third term might focus more on welfare than the reforms anticipated by the market.

As of 11:30 AM IST today, the combined market capitalization of all the new-age tech stocks stood at $49.86 billion.