He tries the rebound there Indian Stock Exchange, hit in the last hours by powerful losses in the wake of the election result. The BSE Sensex index in Mumbai today rebounded by +2,7% in a climate of high volatility.
Yesterday's session, however, ended with a collapse of -6,3%, the worst daily result of 2024 and the previous session had closed with a +3,80% at historic highs while waiting to know the true results of the political elections after on the weekend exit poll they had predicted a solid majority for the National Democratic Alliance, the coalition that has supported the premiership of Narendra Modi and his Hindu nationalist party, the BJP, for a decade.
Instead the exit polls were denied by a election result which saw the outgoing Indian Prime Minister, Narendra Modi, win the elections but with very little consensus. The BJP party has fallen backwards compared to 2019 and has not achieved the result that the leaders had spoken of. With the counts well under way, the prime minister's NDA alliance is given 292 seats and the opposition front 232, at 45% and 41% respectively. In fact, it is almost a head-to-head match that apparently Modi and his party did not expect. How did they not expect that the BJP would stop at just 239 seats, losing 64 compared to 2019, while Raul Gandhi's Congress rose to 100 seats, gaining 48.
To form the government in India it is necessary for a single party, or an alliance, to have at least 272 out of the 543 total seats in Parliament. The Hindu party did not break through in the south of the country, the richest part, but lost sensationally in the central area, its traditional stronghold, known as the "Hindi belt". The most stinging defeat was that in the state of Uttar Pradesh, where the prime minister even lost in the constituency of Ayodhya, the city that symbolizes the union between Hinduism and politics.
The government must be able to carry out several key reforms
A narrow victory for Modi's alliance raises questions about the new government's ability to push through politically difficult-to-implement reforms in land and labor laws, seen as crucial by some investors to sustain the growth of India's economy, already today the fastest in the world. Priorities include developing a viable manufacturing sector to create more better-paid jobs and continuing to push for reforms that strengthen the economy and produce the resources the government needs for economic transition, e.g. through the privatization of state companies and the monetization of assets. Yesterday all the companies linked to the government's development objectives collapsed, with Adani Ports Ltd. taking a nosedive. “The market was pricing in 400 seats for the BJP-led party,” said Amit Kumar Gupta, investment director at Fintrekk Capital. “Investors are a little nervous and will remain so in the next few hours until the accounts are clearly established.”
