Investors are hastily re-jigging their exposure to one of the world’s hottest sharemarkets after Indian Prime Minister Narendra Modi was dealt a major blow in the general election, with his ruling party losing its majority in parliament.

Indian equities dived on the result, erasing around $US386 billion ($579.7 billion) in market value. While Mr Modi vowed to continue as prime minister, his victory was much narrower than exit polls had indicated, meaning the Bharatiya Janata Party will need to rely on allies to form a government.