On Thursday, Rahul Gandhi claimed that Prime Minister Narendra Modi and Home Minister Amit Shah were “directly involved” in the country’s “biggest stock market scam,” which resulted in retail investors losing ₹30 lakh crore. He demanded a probe by the Joint Parliamentary Committee into what he described as a “criminal act.”
NDA’s win on June 4th was not a huge surprise, but the stock market’s reaction was something nobody predicted. It was the worst crash on Dalal Street in 4 years.
Here’s the timeline of everything that happened:
| Stock market cheers turn into cries 13th May: Amit Shah says “Buy shares before June 4th.” 19th May: Narendra Modi says “Stock markets will break records on June 4th.” 1st June: Last phase of polling. Media releases exit polls. 3rd June: The stock market breaks records and reaches an all-time high. 4th June: Biggest stock market crash in 4 years. Investors, especially small ones, lose ₹30 lakh crore. |
Here are the key highlights of how the markets reacted to the election results:
- Sensex plunged by 4,389.73 pts. Nifty50 dropped 1,379.40 points.
- Small and midcap stocks face severe losses.
- The market volatility gauge surged by over 23% as investors rushed to book profits.
- Several blue-chip and PSU stocks tanked sharply.
We can’t say if PM Modi and Amit Shah are to blame for the stock market crash, but we can say this – people without an advisory license CANNOT give you investment “advice”. So this begs the question – what is investment “advice”
In India, an investment advisor must have certifications, including NISM Series-X-A and Series-X-B, apply for and obtain SEBI registration, and complete periodic continuing professional education (CPE).
To put it simply, here’s how you can avoid the stock market scamsters. A non-certified person is allowed and not allowed to say certain things when talking about the markets on a public platform.
| Allowed | Not Allowed |
| Providing factual market information “Sensex increased by 2% last week” | Recommending specific stocks, bonds, or mutual funds “You should buy XYZ stock” |
| Sharing personal opinions about the market “I believe the tech sector might perform well this year” | Guaranteeing or implying guaranteed returns on any investment “Invest in this fund and you will earn a 10% return” |
| Commenting on historical performance data of investments without making predictions or recommendations “Historically, the stock market has returned an average of 7% annually” | Making definitive predictions about future market movements “The stock market will rise by 10% next year” |
Last week in a nutshell
Nvidia overtook Apple
Nvidia has overtaken Apple to become the world’s second-most valuable company. Furious demand for the chipmaker’s shares has raised its valuation to over $3 trillion. Shares of Nvidia have more than doubled in value so far this year.
28,000 Samsung employees are walking out
A Samsung Electronics union in South Korea planned to stage a walkout over pay disputes. The union, which represents more than a fifth of the company’s workforce, has asked for an additional day of annual leave and transparent performance-based bonuses.
The holy matrimony of Vistara & Air India
The NCLT on Thursday approved the merger of Air India and Vistara, creating one of the world’s largest airline groups. Air India will be able to connect five and operate more flights on international routes than any other airline.
Week in one number
₹2,460 crore
worth losses were estimated to be incurred by Indian airlines for the year ending March 2025, even though there was seemingly high demand.
Finance Icebreakers
| Sectoral Mutual Funds/ˈsɛktərəl ˈmjuːtʃuəl fʌndz/ (Noun) Mutual funds that invest a significant portion (e.g., 80% or more) of their assets in stocks of companies belonging to a particular sector (Healthcare, Banking etc.). Usually investors based on market trends. |
Let’s understand what a market trend looks like.
Recently, the markets anticipated that the BJP-led NDA would win more than 300 seats. This could have been a major boost for the PSU and infrastructure structure.
However, the election results came worse than expected, and the BJP will now have to depend on the NDA alliance to form a government, which will rattle investors.
In response to this, analysts predict that once the new government is formed, the new budget will focus on the consumption sector along with a few others. So the potential rise in consumer-led companies is an example of a market trend.
If you’re looking for funds that capitalize on this particular opportunity, consider our “Great Indian Middle Class” portfolio.
