The index ended nearly 16% lower on Tuesday as the Narendra Modi-led BJP failed to secure a simple majority on its own and would have to piggyback on allies to form the government. As of 9:45 am today, all the constituent stocks of the index were trading in red.
Other stocks like NBCC, HUDCO, Indian Bank and REC witnessed a decline of more than 5% while railway stocks like IRCTC, IRCON International and RVNL dipped by 4.7%, 6.2% and 7% respectively.
Shares of NTPC, CONCOR, Hindustan Copper, GIC, Central Bank of India, NMDC, Powergrid, PFC, BEL, PNB, Uco Bank, Union Bank of India, HAL, BHEL and SJVN among others witnessed a greater-than-3% fall on charts.
The Index tumbled nearly 14% on Tuesday amid counting of the Lok Sabha election votes and ended in deep red.Also read: 10 years of Modi govt saw 48,000% returns. Will small, midcaps repeat performance?
Despite the fall, analysts are positive on PSUs as the BJP is set to come back.
Manish Sonthalia, Chief Investment Officer, Emkay Investment Managers, expects BFSI to do well along with PSUs and industrials. “BFSI has led the earnings growth and has seen a correction in valuation. Investment-related themes will come into play with power capex building up in the next 3 to 5 years. We are re-rating public sector units as some of the government entities will have an advantage in sectors such as defence, oil marketing companies and power financers,” said Sonthalia.
Quant Mutual Fund Chief Investment Officer (CIO) feels Modi coming back at the helm could mean endorsements of his previous government’s policies, which means that infra, manufacturing and PSU as a theme will continue.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)