KEY STATES UTTAR PRADESH MADHYA PRADESH ODISHA MAHARASHTRA WEST BENGAL ANDHRA PRADESH TOTAL 80 TOTAL 29 TOTAL 21 TOTAL 48 TOTAL 42 TOTAL 25 NDA 36 INDIA 43 OTH 1 NDA 29 INDIA 0 OTH 0 NDA 19 INDIA 1 BJD 1 NDA 18 INDIA 29 OTH 1 NDA 12 INDIA 30 OTH 0 NDA 21 INDIA 0 YSRC 4 BENGALURU, WEDNESDAY, JUNE 5, 2024 FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XXXVII 38, 30 PAGES, `12.00 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E SENSEX: 72,079.05 ▼ 4,389.73 NIFTY: 21,884.50 ▼ 1,379.40 NIKKEI 225: 38,837.46 ▼ 85.57 HANG SENG: 18,444.11 ▲ 41.07 `/$: 83.53 ▼ 0.38 `/€: 90.83 ▼ 0.73 BRENT: $76.78 ▼ $1.58 GOLD: `71,969 ▲ `483 ● BJP SHORT OF MAJORITY, ● CONGRESS, SP & TMC NDA TO FORM GOVT ● UTTAR PRADESH SPOILS MAKE GIANT STRIDES ● ODISHA, AP STATE POLLS BJP’S POLL ARITHMETIC BRING RELIEF TO NDA NDA wins, INDIA shines Modi 3.0 to bank on Naidu, Nitish TEAM FE New Delhi, June 4 543 *OF 543 LS SEATS, 542 WENTTO POLLS; WINS + LEADS AS ATTHE TIME OF GOING TO PRESS PARTY BJP INC SP TMC JD(U) TDP SHIV SENA SS (UBT) NCP NCP (SP) 2024 loss/gain 240 -63 99 +47 37 +32 29 +7 12 -4 16 +13 7 -9 -1 -7 -- DMK AAP RJD YSRC CPI (M) JMM CPI JD(S) BJD SAD 22 3 4 4 4 3 2 2 1 1 -2 +2 +4 -18 +1 +2 0 +1 -11 -1 4,389.73 points 5.74% Mar 12, 2020 Feb 24, 2022 Mar 13, 2024 Mar 23, 2020 June 4, 2024 June 4, 2024 Close, June 3 40,788.10 Close, June 4 -11.4 May 23, 2023 -13.4 May 16, 2014 -13.5 May 16, 2009 BSE Midcap 44,367.67 3,579.57 -14.2 May 13, 2004 Nifty (` trillion) -5.74 -5.93 SENSEX -0.76 Close, June 3 Indices return on election result day (in %) Sensex 17.74 76,468.78 -31.1 TOTAL SEATS AFTER GAINING OVER 3% on Monday, benchmark indices tumbled by almost 6% — their worst performance on an election result day since 2004 — on Tuesday. While the market had been nervous in the past few weeks,as indicated bythe IndiaVIXthat has doubled in the past six weeks, election results indicating BJP’s inability to garner a clear majority soured the market mood. The Sensex and Niftywitnessed their worst falls in absolute terms. The Sensex fell 4,389.73 points or 5.74% to close at 72,079.05 points. Similarly, the Nifty also fell 1,379 points or 5.93% to close at 21,884.50 points.Both indices fell more than 8% intraday. The mid-cap and small-cap indices fared worse, falling 8.07% and 6.79%,respectively. The sharp fall in the stock markets saw `31.1 trillion of investor wealth being wiped out in a single day — the worst ever fall. The rout was so bad that 791 stocks or 23% firms listed on the BSE hit the lower circuit. Both foreign and domestic institutional investors turned net Investors' wealth loss RESULT DAY SHOCKER -0.69 18 VIVEK KUMAR M & JOYDEEP GHOSH Mumbai, June 4 0.90 1.12 OTH Congress leader Rahul Gandhi leaves party headquarters with sister and party leader Priyanka Gandhi Vadra in New Delhi on Tuesday AP Bear hug wipes out `31 trillion wealth 17.34 INDIA 232 NDA 293 Prime Minister Narendra Modi greets supporters on his arrival for a meeting at the BJP headquarters in New Delhi on Tuesday PTI 0.77 0.37 evening (down 63 from its 2019 tallyof 303),ending a decade of single-party dominance. The NDA TILL TUESDAY MORNING, India tally was at 293, which was much was debatingwhetherthe National more than the halfway mark Democratic Alliance (NDA) will be needed to form the next governable to walk the talk on ‘abki baar ment. 400 paar’ and whether the ConThe BJPsuffered majorreverses, gress will be able to hold on to its from the East to the West, the strength of 52 in the heartland state of Lok Sabha. Uttar Pradesh, and Acouple of hours could not make PEOPLE HAVE later, the 400 figure expected gains in looked like a bad the South. PLACED THEIR joke as a stunned In first remarks, FAITH IN NDA, nation was busy Modi,in a post on X, FOR A THIRD assessing whether said, “People have the BJP would be placed their faith in CONSECUTIVE able to form a govNDA,fora third conTIME! THIS IS A ernment on its own. secutive time! This HISTORICAL That hope was also is a historical feat in FEAT IN INDIA’S dashed as soon as it India’s history.I bow became clear that to the Janata JanarHISTORY the partywillhave to dan for this affecNARENDRA MODI, depend on at least tion and assure PRIME MINISTER twoofitskeyallies— them that we will Chandrababu continue the good Naidu’s Telugu Desam Party and work done in the last decade to NitishKumar’sJanataDal(U).While keep fulfilling the aspirations of the TDP was ahead in 16 seats, the people. I also salute all our JD(U) led in 12. That means, Prime Karyakartas for their hard work. MinisterNarendra Modiwill forthe Words will never do justice to their first time in his life have to practise exceptional efforts.” the coalition dharma. TherewascheerintheOpposition Contrary to exit polls that pre- INDIA camp, although it could not dicted a landslide for the ruling cross the halfwaymark on its own. alliance, the BJP’s leads hovered around the 240-mark in the Continued on Page 15 points 8.07% ■ FPI net sales see all-time high of `12,436.22 cr 50,979.95 Close, June 3 Bank Nifty ■ FPI short positions 4,051.35 points 7.95% at new high of 355,379 contracts 72,079.05 Close, June 4 sellers on Tuesday. FPIs’ net sales stood at an all-time high of `12,436.22 crore, whereas DIIs sold shares of `3,318.98 crore. More interestingly, FPI short posi- tions rose byawhopping 80.4% on Tuesday to 355,379 contracts — a new high. Market participants, however, kept their chins up, with most 52%rise in India VIX, highest intra-day gain in 9 years believing that the election results would be a temporary blip in the overall scheme of things. Most believe that the strong fundamentals of the economy,which saw the 46,928.60 Close, June 4 GDP grow at an impressive rate of 8.2% in FY24,would provide reassurance to investors. Continued on Page 15 INSIDE Coalition dharma may push back key reforms plan Signal for course correction PAGE 7 PRIYANSH VERMA & SANDIP DAS New Delhi, June 4 How BJP lost the plot in Uttar Pradesh PAGE 8 THENEWGOVERNMENTattheCentremay goslowinsomekeypendingreforms,includinginlabourandagricultureaswellasinprivatisation of state-run firms, given the reducedmajorityoftheNationalDemocratic Alliance (NDA),analysts said. The BJP, which is short of the majority mark on its own, will have to carry allies togetheron keydecisions. The NDA with 117 members is just four shortofthe121majoritymarkinRajyaSabha atpresent.ThesetbackintheLokSabhapolls could make its Upper House majority tenuous overthe coming months. The Modi government made several attemptstocarryforwardstructuralreforms intheeconomy,buthadtobacktrackonmany occasions.Mostnotably,itdroppedtheplans to liberalise land acquisition for industrial purposesin2015andrevampthemarketing of agricultural produce in 2021. Barringthesale ofAirIndia toTata Group in 2022,no big-ticket privatisation of state- THE STATE OF PLAY ■ Four labour codes framed but yet to be notified; farm laws revoked after protests ■ Short of majority on its own in Lok Sabha, BJP will have to carry allies together ■ Going forward, more consultations likely with states on labour, agriculture, land issues ■ In Rajya Sabha, NDA just short of majority, but things might get tougher owned firms could be completed. Thegovernment,in2019-20,hadconsolidated the labour laws into four codes: Code onSocialSecurity2020;OccupationalSafety, Health and Working Conditions Code 2020; IndustrialRelationsCode2020;andCodeon Wages 2019. These four codes, although framed, are not yet notified, as the Centre is waiting forthe states to pass theirrespective ■ GST rationalisation may become a hot potato legislation to enforce these Codes. FE had reported earlier that the new government is likely to implement the codes soon after it assumesoffice,butthatseemsdoubtfulnow. “It (implementation of he codes) requires consensustobebuilt,whichisnowdifficult,as BJPtallyinthetheLowerHousehasreduced,” a prominent trade union leader said on conditionof anonymity. Labourlaws fall underthe concurrent list oftheSchedule7oftheConstitutionofIndia. TheCentredidn’tnotifytherulesearlierasthe intentwas to take all the states on board.But some states refused to frame the respective rules,such as West Bengal.In any case,if the Centre notifies the codes, the states will be “bound to implement the laws”, an official had told FE earlier. LekhaChakraborty,professor,NIPFP,however,said:“I don’t think the implementation willbestalled.However,atripartiteconsultation involving the government, management, and labour unions is essential for the successful implementation of labourcodes.” After the sustained protests by farmers, Modi in November 2021 announced the revocation of the three farm laws.The farm laws had laid down the framework for contract farming, and allowed inter-state and intra-state trade and commerce outside the physical premises of markets notified under stateAPMClegislations,besidesamendment of the Essential CommoditiesAct. “At its core agriculture is a state subject. Withfederalpolityrecoveringlostground,we can expect a more meaningful consultation withthestategovernments.Thegovernment willdowelltoenabletheexistingagricultural producemarketingcommittees(APMCs)and tomakethemstronger,moretransparentand more efficient,”Siraj Hussain,former secretary,ministryof agriculture,told FE. Continued on Page 15 Editorial: A return to democracy PAGE 10 Fear factor lingers for markets PAGE 11 `3.6 trn wiped off from Adani Group m-cap PAGE 12 WORLD ENVIRONMENT DAY A RED initiative appears in today’s edition of The Financial Express. These pages are an initiative of the marketing solutions team of The Financial Express Group and contains content paid for by advertisers. These pages should be read as an advertisement. BENGALURU