For the first time in four years, the Indian stock market isn’t doing too well. The primary reason? The political party of Prime Minister Narendra Modi.
According to experts, Modi’s party might fall short of forming a majority government, resulting in a lot of uncertainty about how the Indian government will look going forward. It’s believed that because of this, Modi and his political party may have to forge new alliances or call on former partners to try and form a coalition government but even this is uncertain.
Many analysts believe this lack of clarity will inevitably lead to uncertainties regarding economic policies – a big no-no for investors.
If Modi’s political party partners with the National Democratic Alliance (NDA), the next government will have a lot to prove. Until then, investors, who previously expressed confidence in Modi and his government, are willing to play the waiting game.
Nevertheless, Modi is still set to win the political race for India’s top government seat for a record third time. However, unlike previous stints, Modi will have to make do with a much smaller majority.