NEW DELHI — Indian Prime Minister Narendra Modi looked set on Tuesday to retain power at the head of a ruling coalition but his Hindu nationalist party lost its outright majority for the first time in a decade as voters defied predictions of another landslide.
The outcome unnerved investors, with stocks falling steeply as emerging results showed that Modi would, for the first time since sweeping to power in 2014, depend on at least three disparate regional parties whose political loyalties have wavered over the years.
This, analysts say, could introduce some uncertainty into policymaking in the world’s most populous democracy after a decade in which Modi has ruled with a strong hand.
Modi’s Bharatiya Janata Party (BJP) won a majority on its own in 2014, ending India’s era of unstable coalition governments, and repeated the feat in 2019.
Modi said people had placed their faith in the BJP-led coalition for a third time and it was historic, in his first comments since counting of votes began.
“The blessings of the people for the third time after 10 years boosts our morale, gives new strength,” Modi told cheering BJP members at party headquarters in New Delhi.
Promising to work harder and take “big decisions”, Modi listed electronics, semiconductors and defence manufacturing, renewables and the farm sectors as areas of special focus in his third term, without elaborating.
The blue-chip NIFTY 50 and the S&P BSE Sensex both tumbled about 6% each, posting their steepest decline on an election outcome day since 2004, when a BJP-led coalition lost power, as foreign institutional investors sold a record 124.36 billion rupees ($1.5 billion) worth of shares.
At 1615 GMT, TV channels showed the NDA was ahead in about 290 of the 543 elective seats in the lower house of parliament, where 272 is an overall majority.