Indian stocks have worst day in 4 years as Modi’s hopes of a huge majority fade

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Indian stocks plunged Tuesday as vote counting in the country’s election suggested Prime Minister Narendra Modi’s dream of a landslide victory is at risk, raising doubts about his ability to push through more aggressive economic reforms.

India’s benchmark Sensex index, which tracks 30 large companies, and the broader Nifty 50 index each closed down by nearly 6%. The worst daily drop for Indian stocks since 2020 came just 24 hours after both indexes hit record highs as weekend exit polls prompted experts to predict a resounding victory for Modi. The world’s biggest election concluded on Saturday. The 73-year-old ran on his economic record over the past 10 years, a period of robust growth for India.

“This will lead to dependence on allies in making key policy decision… which will lead to policy paralysis and uncertainty in the government’s functioning,” he added. India is the world’s fastest growing major economy and is comfortably placed to expand at an annual rate of at least 6% in the coming few years, but analysts say it needs to achieve growth of 8% or more if it wants to become an economic superpower.

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