India’s Modi, allies to meet after humbling election verdict
MUMBAI: (Reuters) Indian Prime Minister Narendra Modi was set to meet his allies on Wednesday to discuss forming the government, a day after his Hindu nationalist party lost its outright majority in parliament in a surprise election verdict.

Modi’s Bharatiya Janata Party (BJP) won 240 seats on its own in the general election, 32 short of the halfway mark in the 543-member decision-making lower house, according to official results announced late on Tuesday.

The outcome unnerved investors, with stocks falling steeply on Tuesday, since Modi would have to depend on disparate regional parties whose political loyalties have wavered over the years.

The National Democratic Alliance (NDA) led by the BJP won 293 seats, more than 20 ahead of the 272 needed to form a government.

Newspaper said Modi’s halo had dimmed, with the Indian Express’s banner headline reading "India gives NDA a third term, Modi a message."

Modi’s own victory in his seat of Varanasi, considered one of the holiest cities for Hindus, was subdued, with his margin of victory down from nearly 500,000 votes at the last general election in 2019 to a little over 150,000.

Earlier, Indian Prime Minister Narendra Modi’s alliance raced to a majority in early vote counting trends in the general election on Tuesday, but the numbers were well short of the landslide predicted in exit polls, TV channels showed.

The early see-saw trends unnerved markets with stocks falling steeply. The NIFTY 50 and the S&P BSE Sensex were both down over 2% at 0500 GMT.

The rupee also fell against the dollar and benchmark bond yields were up.

The markets had soared on Monday after exit polls on June 1 projected Modi and his Bharatiya Janata Party (BJP) would register a big victory, with its National Democratic Alliance (NDA) seen getting a two-thirds majority and more.

At 0430 GMT, TV channels showed the NDA was ahead in nearly 300 of the 543 elective seats in parliament, a simple majority, in early counting. The opposition INDIA alliance led by Rahul Gandhi’s Congress party was leading in over 200 seats, higher than expected.

Only about 10%-15% of the total votes had been counted at the time, TV channels said.

BJP alone accounted for nearly 250 of the seats in which the NDA was leading, compared to the 303 it won in 2019. Trends also showed Modi leading first, then trailing and leading again in his seat in the Hindu holy city of Varanasi.