Exit polls predicted a landslide victory for Modi’s coalition, sending stock markets soaring the day before the vote was counted.
Opposition Indian National Congress leader Rahul Gandhi has demanded a parliamentary inquiry into the surge in stock prices in the final days of the recently concluded general election, accusing Prime Minister Narendra Modi of giving misleading investment advice.
Gandhi made the comments on Thursday.
Modi’s coalition won the vote with a surprisingly small majority, well below the landslide victory predicted in exit polls over the weekend.
Following predictions from Saturday’s exit polls, stock markets surged on Monday, a day before the Election Commission announced the results, with the NSE Nifty 50 and S&P BSE Sensex rising 3.3% and 3.4%, respectively.
During the election campaign, Prime Minister Modi and some of his cabinet ministers said that stock prices would soar once the results were announced on June 4, and Home Minister Amit Shah said in a television interview, “Buy before June 4. Stocks will soar.”
However, stock markets plummeted to a four-year low on Tuesday – down about 6% – after election results showed Modi’s Bharatiya Janata Party (BJP) losing its majority in the Lower House and his National Democratic Alliance (NDA) narrowly winning a majority and giving Modi a third term in office.
“We are interested in establishing a JPC [joint parliamentary committee] “It is to investigate the role of the prime minister, the home minister and BJP members,” Gandhi told reporters.
“We want to understand who the foreign investors are who made these transactions,” he said.
Modi’s outgoing trade minister, Piyush Goyal, hit back, accusing Gandhi of misleading investors.
“He is worried about Modi returning to power…. He is pressuring foreign investors not to invest in the country,” he said. “We know that the stock market fluctuates as per different forecasts that are released from time to time.”
The NDA won 293 of the 543 Lok Sabha seats, far fewer than expected. The opposition Indian Union, led by Gandhi’s Indian National Congress party, won 232 seats, more than expected.
Market regulator Securities and Exchange Board of India (SEBI) did not immediately respond to an email from Reuters seeking comment.
Sources familiar with the matter said SEBI is examining stock trading patterns for any suspicious transactions ahead of the exit polls and general election results.
Modi’s office, Shah’s aides and a BJP spokesman did not immediately respond to messages seeking comment.
