India election: Why Modi’s narrow win sent the stock market tumbling
Al Jazeera
Indian shares suffered their biggest drop since 2020 after the Bharatiya Janata Party lost its parliamentary majority.
India’s stock market has taken its worst tumble in four years after Indian Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) lost its parliamentary majority.
The shock election result means Modi will need to rely on smaller parties to form a governing majority in the 543-member Lok Sabha, the lower house of India’s parliament, raising uncertainty about the Indian leader’s ability to pursue his pro-business agenda.
The NSE Nifty 50 and BSE Sensex indexes closed at 5.93 percent and 5.74 percent lower, respectively, on Tuesday, after falling by as much as 8.5 percent earlier in the day.
Indian stocks recorded further losses on Wednesday morning before recovering in the afternoon, with the two indexes each up more than 1.5 percent as of 05:30 GMT.
Investors have been overwhelmingly favourable towards Modi’s economic agenda throughout his decade-long tenure.
