After opening on a negative note, Indian share markets Slipped further as the session progressed and ended the day weak.

The benchmark Sensex dropped as much as 5,661 points, or 7.4% to hit an intraday low of 70,785.12 levels, on Tuesday, 4 June.

The sharp drop was primarily driven by uncertainty surrounding the outcome of the Lok Sabha 2024 election results.

At the closing bell, the BSE Sensex stood lower by 4,390 points (down 5.7%).

Meanwhile, the NSE Nifty closed lower by 1,380 points (down 5.9%).

HUL, Nestle, and Britannia were among the top gainers today.

Adani Ports, Adani Enterprises, and ONGC on the other hand, were among the top losers today.

The GIFT Nifty ended at 21,906 down by 1 point.

Broader markets ended the day negative. The BSE Mid Cap ended 8% lower and the BSE Small Cap index ended 6.8% lower.

Barring the FMCG sector all other sectoral indices are trading on a negative note with stocks in the power sector, telecom sector, Energy sector, and oil & gas sector witnessing buying most selling pressure.

Shares of Dixon Technologies, ABB India, and Britannia hit their respective 52-week highs today.

The rupee is trading at 83.54 against the US$.

Gold prices for the latest contract on MCX are trading 0.3% lower at Rs 72,009 per 10 grams.

Meanwhile, silver prices are trading 1.8% lower at Rs 90,417 per 1 kg.

Here are five reasons why Indian Markets are falling today

#1 NDA Tally Falls Behind

According to reports, the NDA was leading with 295 seats at 11.20 AM, while the INDIA alliance secured 228 seats. Others added 20 seats to the tally.

With expectations mixed, all but HUL among the stocks in the 30-share Sensex were trading in the red. SBI, NTPC, and Power Grid were among the top losers.

#2 Heavyweight Stocks Drop

Reliance Industries, HDFC Bank, SBI, ICICI Bank, and L&T were among the top contributors to the fall in the benchmark index at around 12 noon.

Larsen & Toubro (down 8.3%), RIL (down 6%), ICICI Bank (down 4.6%), and HDFC Bank (down 3.5%), were among the top stocks of private sector players that saw a major drop in trade on Tuesday.

#3 PSU Stocks Fall

The majority of PSU stocks hit lower circuit levels due to uncertainties regarding the potential number of seats the BJP-led NDA would secure.

#4 Rupee Weakens

The Indian rupee fell 24 paise to 83.38 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.05% to 104.08 level.

#5 Oil Falls

Oil prices eased in Asian trade on Tuesday, extending losses from the previous session when prices fell to their lowest in four months, as investors worried about supply ticking up later in the year amid cautious demand outlooks from key consumer the US. Brent crude futures fell 0.6% to US$ 77.87 a barrel. Brent closed below US$80 for the first time since 7 February, after falling more than 3% on Monday.
 

Reliance Industries Crashes 10%

In news, Rs 1.7 trillion 9tn) was wiped off of Reliance Industries Ltd's (RIL) investors as shares of the company tumbled 9.6% on BSE today as poll counting estimates showed that Prime Minister Narendra Modi-led NDA alliance was not likely to score as much as exit polls had predicted in the 2024 Lok Sabha elections.

Shares of RIL had made a new all-time high of Rs 3,029 on 3 June when the total market capitalization of the company hit at Rs 20.4 tn. It currently stands at Rs 18.5 tn.

As investors chose to adopt a risk-averse stance ahead of the announcement of Lok Sabha election results, Sensex traded over 6,000 points lower on Tuesday while Nifty was down by nearly 2,000 points, dragged down by heavyweights Reliance Industries and financial stocks.

From the Sensex pack, Reliance Industries, HDFC Bank, and ICICI Bank alone contributed to a 2012-point decline in the index, while L&T, SBI, Axis Bank, NTPC, and Power Grid were other stocks dragging the index downwards.

Defence Stocks Bleed 15%

Moving on to news from the defense sector, shares of defense-related companies plummeted as much as 15% in trade on 4 June as investors rushed to take home partial profits after the bull run seen in these counters in recent times.

Defense stocks have been the flavor of the season under the Modi government, reaching greater highs on the back of the government's push towards the indigenization of defense manufacturing under the Atmanirbhar Bharat theme.

Most defense stocks, including Bharat Dynamics, Bharat Electronics, Hindustan Aeronautics, Mazagaon Dock Shipbuilders, and Cochin Shipyard, have delivered over twofold returns in the past year. With investors sitting on heaps of profits, analysts had predicted a bout of profit booking to seep into the space on the day of the voting of the general elections.

shares of Bharat Electronics were the worst hit within the defense pack, locked in the 15% lower circuit on the BSE. Following closely, shares of Bharat Dynamics, Hindustan Aeronautics, Mazagon Dock Shipbuilders, and Cochin Shipyard were also down around 10-12% each.

Among these, shares of Hindustan Aeronautics, Bharat Dynamics, and Bharat Electronics skyrocketed close to 10% and scaled their all-time highs in the previous session after exit polls predicted a return of the BJP-led NDA, making way for policy continuity by the incumbent government.

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