Tuesday’s election results in India were much tougher than expected, causing a drop in the stock market. Prime Minister Narendra Modi and his Bharatiya Janata Party lost their majority in parliament, forcing him to work with smaller parties. Initial polls had projected the BJP to win between 353 and 401 seats, but the actual results showed a lower number of around 240 seats. This outcome made investors cautious about the future of India’s economy, which has been one of the fastest-growing in the world.
The uncertainty surrounding Modi’s leeway without a majority in parliament raised questions about India’s goal of becoming the third-largest economy in the world after the US and China under his leadership. The country had been attracting foreign investments, especially in comparison to China, during its period of rapid growth. However, the shock of the election outcome affected companies like Adani Ports and Adani Enterprises, experiencing a significant decline in their stock prices. Financial institutions like Bank of India and ICICI Bank also saw drops in their share prices, reflecting the uncertainty in the market following
