Mumbai: Shares plunged on Monday on concerns that a likely Aam Aadmi Party victory in Delhi could force the BJP government to go slow on reforms.
The 30-share Sensex tumbled 490.52 points or 1.71 per cent to close at 28227.39 after hitting a low of 28183.32 during the day.
The 50-share Nifty closed at 8526.35, down 134.70 points or 1.56 percent, continuing downtrend for the seventh consecutive session.
About 928 shares have advanced, 1922 shares declined, and 221 shares are unchanged. The election result will be announced tomorrow and exit polls have predicted a clear majority for AAP.
Adding to the gloom was a dismal set of third quarter earnings from engineering major Larsen & Toubro. The company's quarterly net profit of Rs 867 crore missed analyst estimates by a wide mark.
The stock fell 7.6 per cent to Rs 1,556.30, and soured mood for the capital goods sector in general. The BSE Capital Goods was the worst performer among sectoral indices, shedding a little over 4 percent.
Some market players feel that widespread weakness in corporate weak earnings, more than a possible BJP defeat, could drag market lower in the coming days. "I genuinely don't think that (AAP win) can derail or be a major setback for this market," Sandeep Bhatia of Kotak Institutional Equities told CNBC-TV18 in an interview.
"If the market corrects, it is because of the fact that our earnings season has not resulted in major earnings upgrade. In fact, the consensus is that the earnings (improvement) will come through only at a later stage, which is why the markets may have a correction," Bhatia said.
Apollo Tyres (-12.2 per cent), Tata Steel (-5.8 per cent) and Gail (-4.5 per cent) were among the major earnings casualties with their quarterly performance falling way short of market expectations. Brokerage house CLSA maintained its sell rating on Gail following the earnings miss, while brokerage house Goldman Sachs sounded a cautious note on the steel sector in general.
Shares of power companies like Tata Power (-2.4 per cent) and Reliance Power (-5.6 per cent), which have operations in Delhi, fell on worries that if AAP returned to power, it may force power utilities to lower tariff.
Other key R-ADAG companies Reliance Infra and Reliance Communications too took a beating, falling 8.7 percent and 4.5 per cent respectively. Shares of DLF, which has been targeted by Kejriwal in the past were among the prominent losers, shedding 4 per cent to close at Rs 157.3. However, Infosys, Sun Pharma, ONGC, Dr Reddy's Labs, Wipro and Bajaj Auto bucked the trend, up 1-2 per cent.
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