STORY: Indian stocks suffered their worst intraday fall since March 2020 on Tuesday (June 4).
That's as voting trends in the general election suggested Prime Minister Narendra Modi's alliance seemed unlikely to win the overwhelming majority that was predicted by exit polls.
As the votes came in, it looked likely Modi's own BJP would fail to secure a majority on its own and would need allies in the National Democratic Alliance to form a government.
That could lead to uncertainty over economic policies - like the push for investment-led growth.
This has been a cornerstone of Modi's rule, with the economy growing over 8% in the financial year ended March 2024.
These initial vote counts sparked market turmoil; the Nifty 50 closed down 5.9% and the S&P BSE Sensex fell 5.7%.
The indexes slumped to lows of 8.5% earlier in the day - marking their biggest intraday fall since the first lockdown during the global health crisis in 2020.
That's after hitting record highs on Monday, when investor sentiment was buoyed over projections of a big win for Modi's BJP and expectations of sustained economic growth.
And the rupee ended down 0.5% on the day, marking its worst single-day fall in 16 months.
Analysts said Indian markets are likely to now derate due to higher risk perception - with difficult reforms like changes to land and labour policies, and privatization of state-run enterprises likely "off the table".
