From Investing.com: 2024-06-04 12:16:46

Indian stocks saw their worst intraday fall since March 2020 as vote counting trends in the election signaled Modi’s alliance may not secure a strong majority. Opposition parties could sway economic policies. The NSE Nifty closed 5.93% lower and the S&P fell 5.74%, with markets experiencing their biggest intraday drop since March 2020.

Foreign investors broke records by selling 124.36 billion rupees worth of Indian shares, the most on record. Uncertainty over policy shifts and a move towards welfare programs post-election have led analysts to believe that difficult reforms and privatization may be off the table.

The lack of a clear mandate could lead to volatility. The rupee closed at 83.53 against the dollar, marking its largest single-day fall in 16 months. The bond yield also increased significantly, rising 10 basis points to 7.0382%.

Investors are hopeful that the Modi government will continue to focus on making India a manufacturing hub, attracting foreign investment. Despite the market correction, some investors see this as a buying opportunity, given the long-term benefits of favorable demographics and geopolitical tensions.



Read more at Investing.com: India shares plunge as Modi’s likely narrower win causes policy worries By Reuters