Indian Markets Sell Off as Early Vote Counts Show Modi’s Party Falling Short of Predicted Landslide Victory
Indian financial markets experienced a sharp sell-off as early vote counting trends indicated that Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP)-led alliance may not secure the overwhelming majority initially predicted by exit polls. Investors nervously engaged in profit booking as they awaited greater clarity on the election results.
The markets performed a significant downturn on Tuesday as concerns grew over the BJP-led National Democratic Alliance (NDA) winning fewer seats than anticipated. Both the Nifty and BSE indexes dropped by around 3.7 percent, recovering slightly by early trading.
Despite the market volatility, experts believe that long-term market reactions will be dependent on the BJP/NDA securing the 272 seats required to form the government. The previous day’s rally was driven by expectations of a positive economic outlook under a potential new Modi-led government, further fueled by policies attracting investments and global supply chain realignment benefits.
Foreign and domestic investors are closely watching the election results as they anticipate continued government focus on making India a manufacturing hub, with potential investments in infrastructure and technology contributing to significant growth opportunities.
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