“As BJP does not have a simple majority, the bargaining power shifts materially within the alliance. Most scenarios from here could be taken negatively by the market compared to expectations last week.”

… and the market took the early indications of a blowout victory and sent Indian stocks to an all time high. But as we warned over the weekend, exit polls, “released by various news agencies, have often been wrong in the past and are not impartial”, and boy did we just get a confirmation of today when initial tallies of the actual vote signaled that Modi’s ruling BJP party was struggling to win a majority of seats in national elections, a stunning result considering the exit polls showed he was on pace for a landslide victory.