Indian shares plunged over 8% on Tuesday, set for their worst day in four years and erasing their gains for 2024, as vote-counting trends showed Prime Minister Narendra Modi’s alliance falling short of a predicted landslide victory.
Exit polls in the weekend projected a big win for Modi’s National Democratic Alliance (NDA), leading to markets soaring to all-time highs on Monday (June 3) as investors were buoyed by expectations of sustained economic growth. Traders said the markets were selling off on Tuesday as investors awaited more clarity on the total number seats that the NDA would win.
The NSE Nifty 50 index .NSEI was down 7.2% at 21,605 points as of 12:41 p.m. IST, and the S&P BSE Sensex .BSESN fell 6.6% to 71,366. The indexes fell as much as 8.5%, poised for their worst session since the onset of the COVID-19 pandemic.
They had jumped over 3% on Monday after exit polls projected that the BJP-led alliance will likely get a two-thirds majority in the lower house. With the day’s losses, the benchmarks are down nearly 1% so far this year.
