India’s markets saw their worst one-day loss in about four years as the electoral performance of Prime Minister Narendra Modi’s ruling Bharatiya Janata Party fell short of expectations.

The Nifty 50 plunged 5.93% on Tuesday, while the BSE Sensex lost 5.74%, marking their largest loss since 2020.

The All India Market Capitalization index, tracked on the Bombay Stock index, lost over 31.06 trillion rupees, or about $371 billion on June 4 alone.

The losses on Tuesday meant the Sensex index erased all its gains this year in a single day, going from a 5.85% year-to-date gain on Monday to a 0.22% loss position.

Meanwhile, the Nifty 50 saw its 7% year-to-date gain as of Monday drop to a meager 0.7% increase since the start of the year.

On Wednesday, a day after the election results, the Nifty rebounded and gained 0.7%, while the Sensex was trading 0.26% higher.

Modi is set to secure a rare third term in power, with the BJP winning 240 seats in the lower house parliament, but losing its single-party majority in a tighter-than-expected race.

The BJP-led National Democratic Alliance (NDA) coalition, however, clinched 294 seats, managing to retain the parliamentary majority, crossing the 272 required to form the government.

In the previous general election in 2019, the BJP secured 303 seats, and the NDA won 353 seats. Modi reportedly said in March that he was confident that the NDA would secure more than 400 seats.

The opposition Indian National Developmental Inclusive Alliance coalition, or INDIA, which is led by the Indian National Congress, garnered 233 seats — a much better result than was predicted.

A Goldman Sachs report issued early Wednesday said that “even with a reduced majority, we don’t think macro stability will be compromised.”

However, a weaker mandate would make it more difficult to implement structural policy changes, such as land reforms to aid manufacturing growth and farm sector reforms to enhance agricultural productivity growth.

This is the first time in the last 10 years that the BJP will be running a government without a majority on its own in the Lok Sabha — the lower house of parliament — the Goldman analysts said.

As such, the main challenge for Modi’s party will be managing the coalition partners, who are likely to negotiate for key ministerial appointments.

“We think the government will stick to their announced fiscal consolidation path of 5.1% of GDP in this fiscal year, though we expect some spending re-allocation towards welfare,” the analysts concluded.