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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Narendra Modi is poised to return for a third five-year term as India’s prime minister, according to four exit polls published on Saturday that projected a clear victory for his Bharatiya Janata party and its smaller allies.

Polls conducted by four Indian TV stations and agencies all showed the Modi-led National Democratic Alliance winning a comfortable majority of between 353 and 392 seats in India’s 543-seat Lok Sabha, or lower house.

That leaves Modi with a strong mandate to form the next government, taking him into a second decade as prime minister.

In India’s last election in 2019 the NDA won 352 lower house seats. The Election Commission of India is due to report official results on 4 June.

The exit polls were released after a final round of voting in the marathon election ended on Saturday afternoon and a ban on the publication of opinion polls, imposed when voting in the seven-phase election started on 19 April, was lifted.

The election was held in stages because of the logistical challenges of casting and counting ballots and securing polling stations in a country with diverse geographies and nearly 1bn registered voters.

The results give the first indications of the shape of India’s next parliament after an election that many saw as a referendum on Modi’s decade in power. 

If the polls’ predictions are confirmed on Tuesday when official results are reported, the victory will bolster Modi’s image as one of the world’s strongest leaders at the helm of a fast-growing economy, at a time when its geopolitical clout is growing.

Exit polls have in the past had a mixed record on predicting India’s elections, but in recent years proved to be a more reliable indicator of voters’ decisions. In 2014 and 2019 the exit polls correctly forecast victories for the BJP-led NDA, but were numerically inaccurate, projecting fewer seats than Modi’s bloc actually won. 

“I think this is exactly how things will pan out and we will see a resounding victory for Modi, for the BJP a third consecutive time around without any difficulty,” Shazia Ilmi, a national spokesperson for the BJP, told the Financial Times.

India’s 73-year-old leader campaigned on the slogan of “Modi’s guarantee”, a reference to government welfare programmes that benefit hundreds of millions of Indians, and his record on reducing poverty and developing the world’s fifth-biggest economy. India’s GDP grew at a better than expected rate of 7.8 per cent quarter-on-quarter in the three months to March, and its economy has been one of the world’s fastest-growing since the Covid-19 pandemic.

During the campaign the opposition INDIA alliance sought to attack the BJP on its economic record, including persistently high unemployment, and accused it of seeking to cripple the opposition by jailing two state leaders and freezing some Congress bank accounts on the eve of the election. 

Hours before the exit poll results were published, senior members of the opposition alliance, including Congress leaders Sonia Gandhi and Rahul Gandhi and Delhi chief minister Arvind Kejriwal, claimed that the opposition were themselves set to win. 

Congress president Mallikarjun Kharge claimed that the INDIA alliance would get “at least 295+ seats” — winning the election. Kharge claimed the exit poll surveys were “government surveys because they have the means to manipulate data”. 

Madhavi Arora, lead economist at Emkay Global Financial Services in Mumbai, said in a note that the results “suggest a solid win for the NDA”, with “better traction for the BJP” in states like Maharashtra and southern India where opposition parties are strong. 

“While [the] final outcome may diverge from exit polls, a political continuity is likely to be good for risk assets in the immediate run and macro stability for the medium term,” she wrote.

This is a developing story . . . 

An early-morning shooting in Birmingham’s Tom Brown Village housing community left one man dead.

Police identified the victim as Brandon Wilson. He was 31.

South Precinct officers were dispatched at 1:30 a.m. Saturday to the 500 block of 41st Street North after the city’s gunfire detection system – Shot Spotter – indicated shots fired in that location.  Officers were then updated that a person was down, said Officer Truman Fitzgerald.

Wilson was found wounded in the intersection of 41st Street and 5th Court North.

Birmingham Fire and Rescue Service rushed him to UAB Hospital where he was later pronounced dead.

Fitzgerald said details are limited and no one is in custody.

Wilson is Birmingham’s 59th homicide of 2024. Of those, five have been ruled justifiable and therefore aren’t deemed criminal.

In all of Jefferson County, there have been 82 homicides including the 59 in Birmingham.

Anyone with information is asked to call Birmingham homicide detectives at 205-254-1764 or Crime Stoppers at 205-254-7777.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A scrap metal merchant and an electric vehicle maker that has sold just four cars top the list of so-called “penny” stocks that are out-trading the likes of Tesla and Apple, prompting some analysts to warn that markets are becoming overheated.

Seven of the top 10 most traded US equities in May, as measured by the number of shares bought and sold, are penny stocks worth less than $1, according to Cboe Global Markets. None of the companies are profitable.

The huge volumes in so many little-known stocks suggest a renewed appetite among retail investors for cheap names in which they believe they can quickly make a lot of money.

“When markets get frothy, the speculative froth often hits penny stocks as well — this is a classic sign of market peaks,” said James Angel, a finance professor at Georgetown University.

“Penny stocks tend to be extremely volatile, so you can make or lose a ton of money very quickly,” he added. “That appeals to the speculative urge.”

The frenetic trading comes after a strong rally in US blue-chips over the past seven months, with tech stocks reaching a new record high this week, although on Friday the benchmark S&P 500 index recovered from early lows, but still suffered its first weekly decline in more than a month.

Scrap metal merchant Greenwave Technology Solutions, whose website proclaims “scrap is the new precious metal”, topped the leaderboard for May. It has 588mn shares outstanding, and a daily average of 510mn shares were traded during the month, according to Cboe Global Markets data.

Over that time, its market capitalisation swung between $4mn and $159mn and the value of its shares from 4 cents to 16 cents. The company did not respond to a request for comment.

The only large-cap company to make the top 10 most-traded was Tesla, a regular favourite among active traders. 

While, in value terms, trading in penny stocks is a tiny fraction of the turnover of mega-caps, investors’ increased interest has coincided with a resurgence in so-called “meme” stocks such as retailer GameStop and cinema chain AMC, which benefited from frenzied retail investor interest in 2021. 

AMC was the sixth most-traded US stock in May with volumes more than 7 times their recent average.

“Penny stocks are not the same as the meme stock phenomenon, but let’s say they rhyme. It’s people willing to put fundamentals aside and chase returns,” said Steve Sosnick, chief market strategist at retail broker Interactive Brokers. 

Sosnick’s own weekly scan of the most-traded stocks on Interactive Brokers’ platform has recently thrown up several lesser-known microcap companies.

“It’s emblematic of what I consider to have become a very frothy market,” he added.

Stocks that trade under $1 for a certain period are at risk of being delisted by exchanges and, for that reason, institutional investors tend not to touch them.

The rise in volumes has reawakened concerns about the impact of their financing methods on shareholders as well as the rules that allow them to remain listed. 

Several of the most traded stocks by volume in May have sold new shares recently. The deals, typically in the form of bonds that convert into stock at a discount to the market price, dilute existing shareholders and swell trading volumes when the new shares are resold, which often happens quickly.

Electric vehicle maker Faraday Future Intelligent Electric was the second-most-traded stock in May. Its 2023 accounts, filed this week after a delay due to staffing issues, showed sales of four cars and leases for a further six since a long-delayed launch last year. They also contained a warning that “it will likely file for bankruptcy protection if it is unable to access additional capital”.

Several posts on social media platform Reddit focused on the wild swings revealed in Faraday’s share count. This has soared from 57mn in November to 1.4bn by February, when it did a so-called “reverse split”, swapping three existing shares for one new one. Its latest filing shows 440mn shares outstanding.

Reverse splits have become a common tool for sub-dollar companies as a way of boosting share prices and warding off the threat of delisting. There are 471 companies currently with shares trading under $1 in the US, according to S&P Global Market Intelligence data, up from 125 a year ago.

More than 70 reverse splits have been announced so far this year, according to data provider Wall Street Horizon. The number of such share swaps roughly doubled in 2023 to 219 compared with the previous year despite a major rally in stock markets after a tough 2022.

Greenwave announced a 1-for-150 reverse split this week, effective from Monday. Faraday Future, which is still behind with its financial filings and whose shares have halved since it published its 2023 accounts, has appealed against a delisting decision by Nasdaq.

“The company expects its securities to continue to trade on Nasdaq in the normal course during the pendency of the hearing process,” it told the Financial Times.