The Indian stock market plummeted on Tuesday from record highs, reversing most of the gains from the previous trading session as preliminary results from the closely watched 2024 general elections showed a smaller-than-expected victory margin for the Bharatiya Janata Party (BJP).
The National Stock Exchange of India (Nifty 50) fell 3.8% to 22,400 points, retreating from Monday's record high of over 23,000 points. The Bombay Stock Exchange (BSE Sensex 30) dropped 1.8% to 75,133.82 points at 9:31 AM IST (00:01 GMT).
Exit polls released over the weekend predicted a landslide victory for the National Democratic Alliance (NDA) led by the BJP in the 2024 elections, securing a rare third term for Prime Minister Narendra Modi. Both indices surged over 3% on Monday.
Counting of votes began on Tuesday morning. Early data from the Election Commission indicated that the BJP was poised to win but with far fewer seats than in 2019.
As of 9:27 AM IST (3:57 AM GMT), preliminary results showed that in the 311 constituencies declared, the BJP seemed set to win 153 seats in the lower house of parliament, while the main opposition, the Indian National Congress, was expected to secure 61 seats.
The reduced victory margin for the BJP introduces greater challenges for the party's economic reform agenda, which includes increased infrastructure and manufacturing spending.
Despite strong criticism for its rhetoric towards certain minority groups in India, investors have welcomed the BJP's business-friendly policies over the past decade.
