Opposition stock scam allegations amid LS poll results

The sudden rise and fall in the BSE Sensex and NSE Nifty on June 3 and 4 opened the door for a fresh political battle with politicians from the INDIA bloc, including Rahul Gandhi, alleging that Narendra Modi and Amit Shah had tried to manipulate investors by asking them to invest. during Lok Sabha election rallies.

As exit polls on June 3 predicted a return of the Modi government 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 zoomed more than 3 percent, which was the highest daily gain in 3 years while closing at lifetime highs.

“The exit polls have activated optimism about a memorable victory for the current government. Strong 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, had told Geojit Financial Services.

However, as vote counting began on June 4, stocks saw a bloodbath unlike the last four years since the Covid outbreak. Sensex fell by a huge margin of 4,389.73 points during the midday results while Nifty saw a decline of 1,379.40 points. This resulted in a total loss of over Rs 32 lakh crore ($386 billion) in wealth to investors.

Exit polls predicted the BJP would comfortably secure a majority, winning more than 272 seats in the 543-member parliament, while overall, with its alliance partners, the figure would reach 360-370. Interestingly, on the results day, the Election Commission announced that the BJP had won 240 seats while the Congress had won 99 seats.

Opposition accusations against the Modi government

While much of the losses were recouped in the next two sessions, Congress leader Rahul Gandhi addressed a press conference earlier this week, during which he called for a investigation by the Joint Parliamentary Committee (JPC) into the rise and fall of stock market figures.

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

I say that very high-ranking people committed this scam. Gandhi claimed that foreign investors were buying stocks at high rates while Indian investors were selling and booking profits. Media publishes fake exit polls, BJP internal survey showed them 220 seats, BJP leaders had this information. The intelligence agencies had announced that they would get between 200 and 220 seats. The stock market broke all records on June 3 and on June 4, the stock market collapsed, he accused.

Gandhi also referred to the speeches of Modi and Shah in which the BJP duo asked investors to invest, and said that this was the first time that the Prime Minister made very interesting comments and on several occasions, l 'one after another, saying the stock market was going to explode. At the same time, he has information that the exit polls are wrong. »

The Congress leader asked, “Is it their job to give investment advice? Secondly, why were the interviews given to the same media house, owned by the same business group, which is also under investigation by SEBI for stock market manipulation? Third, what is it? the link between the BJP, fake exit polls and dubious foreign investors?

Referring to the exit poll results, excerpts from a letter written by TMC's Saket Gokhale to SEBI were quoted by News18 as saying, “The investigation must also determine whether the BJP and other polling agencies made billions by manipulating stock markets through exit polls.

Modi government responds to opposition's whys

Senior BJP leader Piyush Goyal spoke out in defense of the Modi government. NDTV quoted excerpts from Goyal's press speech on June 6, in which the BJP man said: “When the results came on June 4, when the market fell, foreign investors sold it cheap and Indian investors bought it with the belief that the Modi government would come and we would benefit. So foreigners bought high and sold low. Indian investors were selling high and buying low. suffered a loss. »

“Rahul Gandhi still has not overcome the defeat in the Lok Sabha elections. Now he is conspiring to cheat investors in the market. Today, India has become the fifth largest economy,” Goyal said, adding that “We we all know that the stock markets react. to the various estimates and forecasts during any election, or for that matter to any forecast by banks and institutions, ups and downs are normal even in the absence of an event.

Meanwhile, on June 7, the RBI decided to keep its policy rate unchanged for the eighth consecutive time, saying it would maintain a strict vigil on inflation, leading to a rise in benchmark stock indices on the same day.