Share Market In India Today.
India’s stock market has experienced its largest drop in over four years.
Indian stocks fell dramatically after vote counting in the country’s general election revealed that Prime Minister Narendra Modi’s party may not be able to create a majority administration.
The benchmark NSE Nifty 50 share market closed over 6% lower, the largest drop since India’s initial Covid lockdowns in March 2020. Early results indicate that Mr Modi’s political party may need to rely on allies to build a coalition administration.
According to some economists, this could create confusion about economic plans. The NSE Nifty 50, which includes equities in various large corporations, fell 8.5% at one point but finished the day down 5.9% at 21,884.5 points. The S&P BSE Sensex likewise dropped dramatically, closing 5.7% lower at 72,079.05.
The rupee fell 0.5% versus the US dollar, marking its largest drop in 16 months.
More than half of the votes in India’s general election have been counted, and Narendra Modi’s Bharatiya Janata Party (BJP) appears unlikely to win a majority in the 543-member lower house of parliament.
It may have to rely on allies in the National Democratic Alliance (NDA) to form the next government.
Analysts suggest that could lead to some uncertainty over economic policies, such as a push for investment, which has been one of the mainstays of the Modi government’s rule.
“The key question is whether BJP can retain single-party majority,” Ken Peng, head of investment strategy, Asia, at Citi Global Wealth, told Reuters.
If not, then would its coalition be able to deliver economic development, particularly infrastructure?
According to Puneet Sharma, chief executive and fund manager at Whitespace Alpha, if the new administration is dependent on coalition partners, it “may shift its focus” to put more emphasis on welfare “rather than concentrating on reforms during the July budget”.
The Hindu nationalist BJP secured majorities in both 2014 and 2019.
Markets jumped on Monday after exit polls over the weekend indicated that Mr Modi and the BJP would win a substantial victory.
However, it appears that the BJP will not be able to achieve a majority on its own.
Leading Indian stock indexes, according to market analyst Fiona Cincotta, have been “really battered” (BBC).
She also mentioned several “very big fallers” in specific equities, such as oil and gas major Reliance Industries and Bank of India.
In both 2014 and 2019, the Hindu nationalist BJP obtained a majority.
Markets had risen on Monday as exit polls over the weekend predicted that Mr Modi and the BJP would win a substantial victory.
However, it appears that the BJP will fail to achieve a majority on its own.
According to Fiona Cincotta, a market expert, main Indian stock indexes have been “really battered”.
She went on to say that certain stocks, such as oil and gas major Reliance Industries and Bank of India, had suffered “very significant losses.”
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