Explained | Opposition’s allegations of stock market scam amid LS poll results

The sudden rise and fall of BSE Sensex and NSE Nifty on June 3 and 4 has opened the doors for a fresh political battle with politicians from the INDIA block, including Rahul Gandhi, alleging that Narendra Modi and Amit Shah attempted to manipulate investors by asking them to invest during the Lok Sabha elections rallies.

As June 3 exit polls predicted the Modi government's return to the Center for a third term, markets recorded an overall gain of over Rs 11 lakh crore in investor wealth as BSE Sensex and Nifty surged over 3 percent, which was the biggest single-day gain in 3 years as it closes at all-time highs.

"Exit polls have triggered optimism of a memorable victory for the current government. Solid economic data such as GDP growth, the 100-day list of measures and the final budget will be the key points that the market will observe in the coming weeks," Vinod Nair, Head of Research, Geojit Financial Services had saying.

However, when vote counting began on June 4, stocks witnessed a bloodbath unlike the last four years since the Covid outbreak. Sensex fell by a huge margin of 4,389.73 points in the mid-day results, while Nifty saw a drop of 1,379.40 points. It led to a total loss of more than Rs 32 lakh crore ($386 billion) in investor wealth.

Exit surveys predicted that the BJP would comfortably win a majority, with over 272 seats in the 543-member parliament, while overall with its alliance partners, the figure would reach 360-370. Interestingly, on results day, the Electoral Commission Announced that the BJP won 240 seats while the Congress won 99.

Opposition allegations against Modi government

Although many of the losses have been recovered in the next two sessionsCongress leader Rahul Gandhi addressed a press conference earlier this week in which he demanded a Joint Parliamentary Committee (JPC) probe into the rise and fall of stock market numbers.

Gandhi said that after the "fake" exit polls, the stock markets rose and then crashed on June 4 and called it the "biggest stock market scam." The NSE Nifty fell by 1,982.45 points or 8.52 per cent to 21,281.45 during the day on June 4. It subsequently ended at 21,884.50, a sharp drop of 1,379.40 points or 5.93 percent. Sensex and Nifty had earlier declined around 13 per cent on March 23, 2020, when the lockdown was imposed due to Covid-19.

“I am saying that very high-ranking people have carried out this scam,” Gandhi alleged, that foreign investors bought shares at high rates while Indian investors sold and made profits. “Media publishes fake exit polls, BJP internal survey showed them 220 seats, BJP leaders had this information. Intelligence agencies had said they would get between 200 and 220 seats. The stock market breaks all records on June 3 and on June 4 the stock market crashes,” he said. loaded.

Gandhi also referred to mode and Shah's speeches in which the BJP duo asked investors to invest and said: “This is the first time that the Prime Minister has commented very interestingly and several times, one after the other, that the stock market is going to experience a boom. At the same time, he has information that the exit polls are wrong."

The Congress leader asked, "Is it your job to give investment advice? Secondly, why were interviews given to the same media outlet, owned by the same business group, which is also under investigation by SEBI for manipulating the investment market?" values? Thirdly, what is the connection between the BJP, the fake exit pollsters and the dubious foreign investors?

Referring to the exit polls, excerpts of a letter written by TMC's Saket Gokhale to SEBI were published. aforementioned by News18 saying: "The investigation must also determine whether the BJP and any electoral agency have made millions of dollars by manipulating stock markets through exit polls."

Modi govt responds to opposition's whys

BJP leader Piyush Goyal spoke in defense of the Modi government. NDTV aforementioned excerpts from Goyal's press speech on June 6 where the BJP man said: "When the results came on June 4, when the market fell, foreign investors sold at low price and Indian investors bought it with the belief of that the Modi government would come and So foreigners bought at a high price and sold at a low price Indian investors sold at a high price and bought at a low price In a way, Indian investors did not gain even in. this period. suffered a loss."

"Rahul Gandhi is still not over the defeat in the Lok Sabha elections. He is now conspiring to mislead market investors. Today, India has become the fifth largest economy," Goyal said, adding, "We all know that "Stock markets react to various estimates and predictions during any election, or in any case, any forecast from banks and institutions. Ups and downs are normal even when there is no event."

Meanwhile, on June 7, the RBI decided to maintain the policy rate. unchanged for the eighth consecutive time, saying it will keep a close eye on inflation, causing benchmark stock indices to record a hop In the same day.