USD/INR Rallies As Early Vote Counting Suggests A Tighter Race Than Exit Polls Suggested

USD/INR is firmer in the first part of trade, last in the 83.40/45 region, weaker by 0.35% in INR terms. We have unwound virtually all of yesterday's initial rupee rally. Recent highs have been marked above 83.50 (83.575 on April19th), so could be a level to watch on the topside, although RBI efforts to curb volatility may prevent such a test.

• Sentiment has soured in the early part of Tuesday training, as vote counting gets underway. Initial results are still pointing to a Modi victory but not as strong as implied by the exit polling. Still, results can swing around, so markets will watch closely over the next few hours.
• Equity sentiment has been more volatile. The Nifty and Sensex are down over 2.5%, largely eroding yesterday's strong gains. Onshore yields have ticked higher.