NEW DELHI: 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 spooked markets with stocks falling steeply. The blue-chip NIFTY 50 was down 4.4 percent and the S&P BSE Sensex was down 4.2 percent at 0600 GMT.

The rupee also fell sharply 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 Hindu nationalist Bharatiya Janata Party (BJP) would register a big victory, with its National Democratic Alliance (NDA) seen getting a two-thirds majority and more.

At 0600 GMT, TV channels showed the NDA was ahead in nearly 300 of the 543 elective seats in parliament, where 272 is a simple majority, in early counting. The opposition INDIA alliance led by Rahul Gandhi’s centrist Congress party was leading in over 220 seats, higher than expected.

TV channels showed BJP accounted for nearly 250 of the seats in which the NDA was leading, short of a majority on its own, compared to the 303 it won in 2019.

A third Modi term with a slim majority for BJP — or having to depend on NDA allies for a majority — could introduce some uncertainty into governance as Modi has ruled with an authoritative hold over the government in the last decade.

However, politicians and analysts said it was too early to get a firm idea of the voting trends since a majority of ballots were yet to be counted.

“It’s a fair assessment to say 400 at the moment certainly looks distant,” BJP spokesperson Nalin Kohli told the India Today TV channel, referring to some projections that gave 400 seats to the NDA.

“But we need to wait...to have a final picture of the seats because the exit polls speak of a massive sweep, (and) the counting trends currently don’t seem to match that,” he said.

“The BJP-NDA will form the government, that trend is very clear from the start,” he added.

TV exit polls broadcast after voting ended on June 1 projected a big win for Modi, but exit polls have often got election outcomes wrong in India. Nearly one billion people were registered to vote, of which 642 million turned out.

However, if Modi’s victory is confirmed even by a slim margin, his BJP will have triumphed in a vitriolic campaign in which parties accused each other of religious bias and of posing a threat to sections of the population.

SOME PANIC IN MARKETS

Investors had cheered the prospects of another Modi term, expecting it to deliver further years of strong economic growth and pro-business reforms, while the anticipated two-thirds majority in parliament would allow major changes to the constitution.

“The sharp drop in Nifty is because the results, although (in) early trends, present a picture that is a lot different from what the exit polls had shown,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services in Mumbai.

“This is what has led to some panic, some concern. These trends are early trends, to be honest. The market does not want a hung parliament or a coalition government, where you will have a lot of delays in decision making,” he said.

The seven-phase, seven-week poll that began on April 19 was held in searing summer heat with temperatures touching nearly 50° Celsius (122° Fahrenheit) in some parts.

More than 66 percent of registered voters turned out, just one percentage point lower than the previous election in 2019, squashing pre-poll concerns that voters might shun a contest thought to be a foregone conclusion in Modi’s favor.

Modi, 73, who first swept to power in 2014 by promising growth and change, is seeking to be only the second prime minister after India’s independence leader Jawaharlal Nehru to win three straight terms.

He began his campaign by showcasing his record in office including economic growth, welfare policies, national pride, Hindu nationalism and his own personal commitment to fulfilling promises which he called “Modi’s Guarantee.”

However, he changed tack after low voter turnout in the first phase and accused the opposition, especially the Congress party, which leads an alliance of two dozen groups, of favoring India’s 200 million Muslims — a shift analysts said made the campaign coarse and divisive.

They said the pivot may have been aimed at firing up the Hindu nationalist base of Modi’s BJP to draw them to vote. Modi defended himself against criticism that he was stoking divisions between Hindus and Muslims to win votes and said that he was only faulting the opposition campaign.

The opposition INDIA alliance denied it favored Muslims in the Hindu-majority country and said Modi would destroy the constitution if he returned to power and end affirmative action enjoyed by the so-called backward castes. The BJP rejects this.