The 2024 Lok Sabha election results sent shockwaves through the markets, with the Sensex and Nifty witnessing their worst fall since March 2020. The indices erased all gains from the previous day after exit polls projected a strong majority for the BJP-led alliance in the lower house.

The ruling National Democratic Alliance (NDA) was ahead in nearly 300 seats, according to TV channels. This was a significant development as 272 seats are needed for a simple majority in the 543-member lower house of parliament.

The volatility index surged to its highest level since March 2022, reaching 29.79, after easing on the previous day. Anand James, chief market strategist at Geojit Financial, commented that anything short of a strong majority for the ruling party was seen as negative due to the extreme nature of the exit polls.

All sectors were in the red, with bank stocks falling 7.8%, realty dropping 9.1%, and infrastructure declining 10.5%. Oil and gas stocks lost 11.7%, while state-run companies and banks retreated 17% and 16%, respectively.

Adani Enterprises and Adani Ports were the top losers in the Nifty 50 index, each falling 19%. Other Adani group stocks were down between 9-19%, reversing gains made after the exit polls.

Market experts expressed concerns about whether the current numbers would hold or decrease further. Mayuresh Joshi, head of equity research India at William O’Neil and Company, noted that even with a majority, there would likely be some disappointment as the results were below market expectations.

The election results also had an impact on Asian share markets, which retreated as global investors awaited India’s official results. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4%, while Australian shares were down 0.15% and Japan’s Nikkei stock index slid 0.11%.

In early European trades, the pan-region Euro Stoxx 50 futures slipped 0.1%, while U.S. stock futures were up 0.01%. The U.S. labor market’s strength was closely watched, with the Job Openings and Labor Turnover Survey (JOLTS) due to be published later.

Overall, the market volatility and uncertainty surrounding the election results have led to a cautious outlook among investors, with many closely monitoring developments both in India and globally.