Sensex, Nifty ended 6% down as election results contradicted exit poll forecasts of major NDA victory

Sensex and Nifty, which fell by eight percent earlier, have reduced their losses to five percent in afternoon trading. At 2.40 pm on Tuesday, the BSE Sensex dropped by 4,165.91 points or 5.45% to 72,302.87, while the NSE Nifty decreased by 1,303.85 points or 5.60% to 21,960.05.

Contrary to predictions of a significant increase, Sensex and Nifty have declined as the vote count has shown that exit polls were incorrect in forecasting a large NDA victory. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, mentioned that the significant drop occurred because the current results did not meet the expectations set by the exit polls that the market had already taken into account the previous day. 

If the BJP does not secure a majority by itself, it will lead to disappointment, which is being mirrored in the market. It is also possible that Modi 3.0 might not focus on reforms as much as anticipated by the market and instead shift towards a more welfare-centric approach. The strength of FMCG stocks is starting to be shown in the market.