LS poll impact: PSU shares in free fall mode; most stocks hit lower circuit

Government-owned shares witnessed intense selling pressure as analysts feared that the relatively poor showing of the Modi-government may impact its reforms agenda.

Most of the shares of PSU companies were locked at the lower circuit in intra-day deals on Tuesday, as the actual counting of votes for the Lok Sabha election displayed a contrast picture as against the exit poll results.

As of 11:20 AM, the Bharatiya Janata Party led Narendra Modi National Democratic Alliance (NDA) was leading in 297 seats out of the 543 strong parliamentary constituencies as against the average exit poll prediction of over 350 seats.

Analysts believe that the relatively poor showing by the Modi-government may impact the government's reforms agenda.

"The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday. If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market. Also it is possible that Modi 3.O may not be as reform-oriented as the market expected and may turn more welfare- oriented", said  Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The Nifty CPSE and PSE indices had tumbled over 13 per cent each to 6,104 and 9,828, respectively. Meanwhile, the Nifty PSU Bank index cracked 12.5 per cent.

Among individual stocks, Power Finance Corporation and REC hit the 20 per cent lower circuit at Rs 444 and Rs 484, respectively. Bharat Electronics (BEL) too nose-dived 20 per cent to a low of Rs 255, and quoted 18 per cent lower at Rs 263.

BHEL, Gail India, Container Corporation of India and ONGC tumbled 15-18 per cent each. Similarly, Hindustan Aeronautics, SAIL, HPCL, Coal India, NTPC, Power Grid Corporation of India, Oil India, IRCTC, NMDC and NHPC were the other major losers - down over 10 per cent.