Rahul Gandhi seeks probe into stock market moves during India elections

Exit poll projections of big wins by Modi’s alliance sent stock markets surging a day before votes were counted.

Opposition Indian National Congress leader Rahul Gandhi has demanded a parliamentary investigation into sharp stock market moves towards the end of the just-ended national elections, alleging that Prime Minister Narendra Modi gave misleading investment advice.

Gandhi made his comments on Thursday.

Modi’s alliance won the vote with a surprisingly slim majority, well below the landslide forecast by the weekend exit polls.

Projections made by Saturday’s exit polls sent stock markets surging on Monday with the NSE Nifty 50 and S&P BSE Sensex jumping 3.3 percent and 3.4 percent, respectively, a day before the Election Commission declared the results.

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.”

Stock markets, however, crashed to a four-year low on Tuesday – down nearly 6 percent – after election results showed Modi’s Bharatiya Janata Party (BJP) lost its outright majority in the Lok Sabha, the lower house of parliament, and the BJP-led National Democratic Alliance (NDA) won a narrow majority to give Modi a third term.

“We are interested in having a JPC [joint parliamentary committee] to investigate the role of the prime minister, home minister, BJP members,” Gandhi told reporters.

“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 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.”

The NDA won 293 of the 543 Lok Sabha seats, much lower than projected. Gandhi’s Congress-led opposition INDIA alliance won 232, higher than projected.

The Securities and Exchange Board of India (SEBI), the markets regulator, did not immediately respond to a Reuters news agency email requesting comment.

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

Modi’s office, an aide of Shah and a BJP spokesperson did not immediately respond to messages seeking comment.