4,000-point crash not enough! Sensex may fall more if NDA tally falls below 300 seats

But this may just be the beginning of a short-term downtrend in the market if NDA's seat tally turns out to be below the 300-level, analysts say.

"Following the exit poll results, the market had factored in around 350 seats for NDA and now if it falls below 300 then it would be a big disappointment for ," said Kranthi Bathini of .

Some analysts are also of the opinion that the market could be over-reacting to early trends.

"Due to physical counting under VVPAT, the process is slower this time around. I feel the market will once again get steady and high-beta stocks will be bought," said Dalal Street veteran Deven Choksey.

If the market falls further, high-flying PSU stocks as well as those being labelled as "Modi stocks" are likely to be among the worst hit in the avalanche.

Nifty PSU Bank index was the worst hit as it crashed over 11% with all stocks in the index seeing double-digit losses. Other PSU stocks like PFC, REC and BEL fell up to 20%.

Dalal Street's fear gauge India VIX jumped 40% to 29.79 to record its biggest single-day gain in 9 years. The flight to safety was visible as the 10-year bond yield spiked 10 bps to 7.04%.

With a 2% fall in the pre-election week, investors had baked in around 300-320 seats for NDA but exit polls set the benchmark higher only to be disappointed on Tuesday morning.

However, elections may not have an impact in the long run as investors train their focus back to fundamentals, growth outlook and company earnings.

More to come…