Probe sought into market moves during Indian poll results

Projections made by Saturday’s exit polls sent stock markets surging on June 3, but once the election results were out the next day they plunged drastically

• Shajil Kumar
• 06 June, 2024

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By: Shajil Kumar

India’s opposition Congress leader Rahul Gandhi has demanded an investigation into sharp stock market moves towards the end of the just-ended national elections, alleging on Thursday that prime minister Narendra Modi gave misleading investment advice.

Modi’s Bharatiya Janata Party fell short of the majority, but along with its alliance partners it scraped through the halfway mark. However, it fell short of the landslide forecast by exit polls last weekend.

Projections made by Saturday’s exit polls sent stock markets surging on June 3, with the NSE Nifty 50 and S&P BSE Sensex jumping 3.3 per cent and 3.4 per cent respectively, a day before the Election Commission counted votes and declared results, dragging the markets back down again.

Modi and some of his ministers had said during campaigning that the markets would surge when results were declared on June 4, with Home Minister Amit Shah saying in a television interview, “buy before June 4, they will shoot up”.

Gandhi told reporters: “We are interested in having a joint parliamentary committee (JPC) to investigate the role of the prime minister, home minister, and other BJP members.” He was referring to comments made by them during the campaign and a Joint Parliamentary Committee probe.

“We want to understand who are the foreign investors who did these trades?” he said.

Modi’s outgoing trade minister Piyush Goyal returned the accusation, saying that it was Gandhi who was misleading investors.

“He is worried that Modi is coming back to power… He is pressuring foreign investors to not invest in the country,” he said. “We know equities markets undergo changes according to various estimates presented from time to time.”

On Tuesday, the markets crashed to a four-year low – down nearly 6 per cent – after election results showed Modi’s Bharatiya Janata Party (BJP) had lost its outright majority and the BJP-led National Democratic Alliance (NDA) won only a narrow majority.

The NDA won 293 seats in the election, much lower than projected. Gandhi’s Congress-led opposition ‘INDIA’ alliance won 232, higher than projected.

Markets regulator the Securities and Exchange Board of India (SEBI) did not immediately respond to an emailed request for comment.

A source familiar with the developments said SEBI was examining share trade patterns ahead of the exit polls and general election results for any suspicious transactions.

Modi’s office and an aide of Shah did not immediately respond to requests for comment.