MUMBAI: Stock markets opened in the red on Tuesday, falling more than 2%, as early election trends suggested a lower-than-expected number of seats for Prime Minister Narendra Modi’s party.
The initial trends show a different picture from the optimistic post-poll projections, many of which had predicted a clear two-thirds majority for the BJP and its allies.
The markets had rallied on Monday, hitting record highs and closing 3.5% higher, marking their biggest gain in 39 months.
Markets, which traditionally favor policy continuity, are looking forward to Modi’s promise of infrastructure-led economic policies and business-friendly reforms.
However, if these early trends persist and the NDA alliance wins fewer seats than it did in 2019, analysts say markets could experience some short-term volatility.
Votes are being counted after hundreds of millions of Indians participated in the world’s largest election, held over seven phases across six weeks, with almost a billion registered voters.
To form the government, a party or alliance needs to win more than 272 seats in the 543-member parliament.
Prime Minister Modi is eyeing a rare third consecutive term for himself and his Bharatiya Janata Party (BJP).
More than two dozen opposition parties have united to challenge Modi and the BJP, hoping to prove the exit polls wrong.
As the vote count progresses, the markets will be closely watching the results, with potential implications for future economic policies and reforms.
BBC
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