India’s Nifty 50 slides nearly 4% as early vote counting signals slim Modi win

Investing.com-- Indian stocks fell sharply from record highs on Tuesday, reversing a bulk of their gains from the previous session as early vote counting in the closely-watched 2024 general election presented a less sweeping win for the BJP than expected.

The Nifty 50 slid 3.8% to 22,400 points, retreating from record highs of over 23,000 hit on Monday. The BSE Sensex 30 sank 1.8% to 75,133.82 points by 9:31 IST (00:01 GMT).

Both indexes had rallied over 3% on Monday after exit polls released over the weekend presented a sweeping victory for the BJP-led NDA alliance in the 2024 elections. The scenario also presented a rare third term for Prime Minister Narendra Modi.

Counting of the votes began on Tuesday morning. Early data from the Election Commission showed the BJP pegged for victory, but with a much narrower majority than seen in 2019.

As of 9:27 AM IST (03:57 GMT), early counting showed that of the 311 constituencies that had declared votes, the BJP appeared poised to win 153 seats in India’s Lower House, while the Indian National Congress, the main opposition party, was set to win 61 seats.

A narrower win for the BJP presents a tougher path for the party to carry out its planned economic reforms, which include more spending on infrastructure and manufacturing.

Investors have so far welcomed the BJP’s pro-business policies over the past decade, although the party’s rhetoric towards certain minorities in India has drawn heavy criticism.