The market capitalisation of the Mukesh Ambani-led Reliance Industries has eroded by Rs 96,000 crore in four days, making TCS the most valued firm in India once again.
The fall in Reliance shares by 11 per cent is largely on account of the meltdown in the Bombay Stock Exchange (BSE).
Is this an indication of Dalal Steet increasingly growing nervous as the result date of the ongoing elections inches closer?
An article in the Times of India on Sunday said the best way to figure out which way the election is headed was to closely follow the rise and fall in stocks.
BSE is known to be covertly biased towards the Narendra Modi government. An indication of the election outcome beforehand could be solid gold to capitalise, in the run-up to the election results. Brokerage firms and corporate houses, therefore, constitute their own internal studies, a sort of exit poll. The results are available with them even before the actual results are declared, the article said.
Is the assumption that a coalition government is being formed, spooking Dalal Street?
According to news portal The Quint, several stock market experts are of the opinion that their initial prediction of the BJP winning a simple majority in the ongoing Lok Sabha polls might not come true.
“Following the fifth phase of elections, analysts and brokers on the Street have revised their stance and are now finding the prospect of a coalition government, more likely,” the portal said.
The equity market always favours a stable government and thus has a natural bias towards a situation in which Modi comes back to power with a similar majority, thus allaying the uncertainty it associates with a coalition government.
The market players are now expecting a slide in the bourse when the election results are declared on May 23 and are thereby playing cautiously.
With the equity market running into losses again on Thursday, Dalal Street has now extended its losses to the seventh straight day.
Even large-cap stocks like Reliance, SBI, ICICI Bank have slipped 3 to 5 percent.